#11 - Household indebtedness, which some theorists regard as

[Adam Tyson]

Good question, gen! The standard for a weaken question is substantially lower than where you have set it in this analysis, because we don't actually have to prove anything. Instead, for a weaken question we only need to introduce some doubt about the validity of the conclusion. Just a little doubt will do!

In this case, the author is arguing that household debt cannot have been the cause of the recent recession, because low income households could not have gotten into enough debt to have mattered. He thinks that only the very affluent had debt, and since they had assets that debt wouldn't have caused them to reduce spending.

Now all we have to do it suggest that maybe, just maybe, household debt COULD have caused a reduction in spending that led to the recession. Answer A supplies that by telling us that there is a third group involved, not mentioned by the author, which is the group of middle-income people. Maybe they had enough debt to make the difference? That's not a third cause, gen - it's still the "household debt" cause, the one the author claimed did not cause the recession! That's exactly what we wanted to see!

[mrcheese]

I was going to say, I picked D. I see the false dilemma that is present in the stimulus and being more familiar with possible flaws in the stimuli would have led to the correct answer (for me anyway).

D says: "DURING a recession the affluent usually borrow money..."

If they are borrowing money during the recession it would have no impact on what the cause of the recession was.

That is the way I see it. D becomes the type of answer choice where you just have to read it more closely...

[Claire Horan]

Hi Mr. Cheese,

This is a good statement of why answer choice D doesn't weaken, and is in fact irrelevant, to the argument:

If they are borrowing money during the recession it would have no impact on what the cause of the recession was.

Good job with your analysis!

[ashpine17]

Honestly, I was confused even before hitting the answer choices. How exactly does household indebtedness, which I assume is referring to the amount of debt or money each household owes, contributes to a recession? Is it the decrease in spending that households undergo in order to pay off said debt that is causing the recession? And for this question, why is it okay to bring in the middle class when they were previously unmentioned in the stimulus?

[ashpine17]

And the author tries to counter the claim the theorists make in the stimulus by stating that the lower-income households were the ones who didn't have the debt because people without assets couldn't get loans. But why couldn't household debt still be the cause if the wealthy were the ones in debt? Is the author assuming the wealthy would have been able to pay off the debt without decreasing spending? Or am I looking too much into this?

[Adam Tyson]

I think you may be too focused on the details here, ashpine17, and trying to make sense of this argument in the real world, like it's a question about economics. We don't need to do that on the LSAT! We just need to focus on the argument's structure and find the flaw in that structure.

This argument does make real world sense, and the author explains it (and I think you got it based on your first post). Rich people can still buy stuff even if they have debt, so their debt couldn't have caused the recession. Poor people don't have debts. Thus, the author says, household debt couldn't have caused the recession.

This argument presents something like a false dilemma, or a failure to consider additional options. What if there is a third group, neither very affluent nor very low income, some middle-income group that had enough debt that they would reduce spending enough to cause a recession? If that's so, then perhaps it was their household debt that was the cause?

Stripping away the details, the author is arguing that a group at one end of a spectrum couldn't be the cause, and the group at the other end couldn't be the cause, so therefore nothing on that spectrum could be the cause. To weaken that we want to point out that there may be something in the middle of the spectrum that could be the cause. That's what answer A does, making it our winner.

Don't get too caught up in the details! Just find that underlying structure.

[ikim10]

Hello. I managed to narrow down the answer choices to my 2 contenders (A) and (C). I ended up choosing (C) over (A) for 2 main reasons:

1) (A) mentioned middle-income households, which was not mentioned in the stimulus. Even though on Weaken questions new information can be brought in, because the stimulus mentioned how household indebtedness could be the cause if lower-income household decreased spending, I thought the actions of middle-income households was irrelevant.

2) Even though (C) qualified the decrease in spending by lower-income household by "somewhat," I thought it was stronger than (A) because it specifically mentioned one of the causes in the stimulus that could cause household debt to be the cause of the recession.

I diagrammed the relationships below like this:

lower-income households own most debt
and household debt causes recession
affluent households own assets


lower-income households decrease spending
and household debt causes recession
affluent households fail to increase spending




The author argues that one of the causes is not true:

lower-income households do NOT own most debt
and       household debt does NOT cause recession
affluent households own most debts and assets

I thought (C) showed that lower-income household did decrease spending (somewhat), implying that they owned some of the debt, thereby fulfilling the causal relationship posed by the author and weakening it.

[Rachael Wilkenfeld]

The fact that they didn't address middle-income households is the exact reason that it weakens the argument here, ikim! The author of the stimulus is creating a false dichotomy, making it look like the only households that matter are those at the extreme ends. But there are so many others in the country, and answer choice (A) exploits that fact. If middle-income households are decreasing spending, it doesn't matter if low-income households are overwhelmed by debt or not. We have the necessary decrease in spending that "some people" think causes recessions. The author is saying household debt does not cause recessions. Answer choice (A) weakens that by showing that we don't have the cause, but we still have the effect of a recession. Another way to think about it is this---the author is arguing against the idea that household indebtedness causes recessions. Answer choice (A) strengthens the idea the author doesn't like by showing household indebtedness (the cause) occurring before the recession (the effect). So even though middle-income households were not a part of the stimulus, they are a part of the overall economy and were not outside of the scope of what we can use in an answer choice.

Answer choice (C) is not something that weakens the argument. Somewhat decreasing spending doesn't tell us about the indebtedness of those households, nor does it indicate that the households held "most" of the debt as in the stimulus. We don't know if the low-income households are decreasing spending due to debt, or due to some other reason. It's missing a key part of the causal chain proposed by the author.

Hope that helps!

[jwooon]

Hello,

I think I understand a majority of the points mentioned in this forum chain and I understand the main point of why (A) is correct (bc it is a false dilemma, it exploits the claim made by the author saying that only affluent households can have debt by saying that middle-income households could ALSO have assets, therefore, have debt).

What I am confused about is the causal relationship (if there is any) between debt/spending and the recession. From what I understand from the stimulus, high debt leads to decreased spending, which causes the recession. However, none of those information are used to support the author's argument, it is actually used to support the theorists who the author disagrees with (if that, since the relationship is not explicitly mentioned and not even that clear implicitly). So how can I assume that (A) implies that middle-income households stopped spending as much and that is what caused the recession. Is this an assumption that needs to be made? Or is it just common knowledge that I am lacking.

Additionally, if indeed the causal relationship is common knowledge or assumption that I should have made while answering the question, how is the wording of (A) enough to weaken the stimulus? The stimulus states that affluent households hold most of the debt, while (A) states that middle-income households hold enough debt that they have begun to decrease spending. Couldn't middle-income households have enough debt to decrease spending, but that debt is still incomparable to the debt that affluent households hold? (ie. those statements can coexist therefore does not create a paradox)

[Jeff Wren]

Hi jwooon,

This argument can be a bit tricky to follow, as it involves an opposing argument and counter-argument as well as a causal chain of reasoning.

First, let's be clear on the opposing argument "which some theorists regard as causing recession."

They believe that:

household indebtedness causes a decrease in spending, which in turn causes a recession

In other words, when households have a lot of debt (such as maxed out credit cards), they have less free cash to spend on things (such as goods and services), which then slows the economy into a recession.

Now the first sentence of the stimulus doesn't explicitly state that household indebtedness causes a decrease in spending, which in turn causes a recession, it just goes straight from household indebtedness to causing a recession (and skips the middle step). However, this is the mechanism by which household indebtedness would cause a recession and is explained in the second sentence of the stimulus.

In the second sentence, the author of the argument admits that "if most of the debt was owed by low-income households" (who don't have the assets to pay off the debt), then "high household debt levels could have been the cause of the recession" (my emphasis). In other words, the author admits that this group of "low-income households might have decreased spending in order to pay off debts" (my emphasis).

Now the author disagrees that household debt caused the recession, but the reason that the author disagrees is that this author believes that only the affluent hold most of the debt, and the affluent (being rich and having assets to pay off their debts), would not need to decrease their spending, so household debt would not cause a recession.

Because this question is a weaken question, it is important to realize that nothing in the stimulus is accepted as true. All of the information in the stimulus is in question/suspect and open to be attacked by the answer choice.

For example, the author of stimulus declares that "quite affluent people must have owed most of the household debt," but this is not a statement of fact that cannot be disputed. Instead, it is a statement that the author believes to be true based on the premise that "money is not lent to those without assets."

However, as Answer A points out, it possible to have some assets (and therefore be able to be lent money and acquire household debt) without being affluent. The argument is overlooking middle-income households (which actually are the majority of households in the United States at least). While you don't need to know this piece of economic demographic information to answer the question, it does help to see that the argument is missing/ignoring a huge segment of the population.

While it is possible that middle-income households owed enough debt to decrease spending even while affluent households hold most of the debt, it is also possible that middle-income owe more debt than the affluent (and the statement in the stimulus is incorrect for the reasons stated above.) Either way, it doesn't matter. As long as there are middle-income households that have household debt and this has caused them to decrease spending, this weakens the argument. The author is assuming that there wasn't decreased spending (since the affluent wouldn't need to decrease their spending), and Answer A shows how household debt did cause decreased spending, which in turn may have caused the recession.