#11 - Household indebtedness, which some theorists regard as

[Administrator]

Complete Question Explanation

Weaken. The correct answer choice is (A)

The conclusion of this Stimulus is the negative of the theory that household debt causes recession. Again, this is typical of the LSAT, stating what “some theorists” believe then concluding the opposite.

• Premise: money is not lent to those without assets.

Subconclusion/premise: quite affluent people must have owed most of the household debt;

• Conclusion: Household debt is not the cause of the recession.

In attacking this Stimulus, one immediately suspects the two premises cited above. If those premises are false, it weakens (perhaps even destroys) the resulting conclusion. The reasoning used by the author here is also weak. The initial premise is weak; money is lent to those without assets all the time. The first conclusion (subconclusion and premise for the final conclusion) does not follow from the initial premise.

There is also a cause-effect relationship stated in this stimulus, although it is stated negatively. The cause is household debt and the effect is recession. To weaken CE relationships, you show an alternative cause, an effect with no cause, cause with no effect, or a reversal of order.

The Question Stem reveals that this is a weaken question type.

Answer Choice (A): This is the correct answer choice. The Stimulus tells us that decreased spending may be a cause of recession, and in this answer choice, if the household debt of the middle-income families had reached a level that would have caused reduced spending, this may have been a cause for the recession.

Answer Choice (B): This answer should be eliminated as a “so what?” answer. The Stimulus does not address the level of household debt relative to the level of household assets, as this answer choice does. Having more household debt than assets held by households may in fact contribute to a recession, but we do not know this relationship.

Answer Choice (C): This answer should be eliminated. Answer choice (C) could in fact strengthen the conclusion that household debt is not the cause. This is where the negative expression of the causal relationship can be tricky and troubling. The decrease in spending by the lower class is household debt, and thus it is not an alternate cause.

Answer Choice (D): This is a “so what?” answer. So what if the affluent in a recession borrow money only to purchase assets? That has nothing to do with the conclusion that it is not household debt that causes recessions.

Answer Choice (E): This answer could strengthen the conclusion, and thus should be eliminated. If household debt is the category of debt least likely to affect the economy, it probably would not be likely to cause a recession. Additionally, answer choice (E) is a restatement of the cause and effect relationship, and thus it cannot weaken it.

[Mkendz]

I'm just having some trouble clarifying why Answer Choice "A" is a better Choice than Answer "D". Although this is a weaken question the stem instructs to "cast doubt on the argument" (the argument disagrees with the information within stimulus stating that "therefore the real cause must lie elsewhere") because of this I am actually trying to weaken the argument by selecting an answer choice that supports the information in the stimulus.
both answer choices A and D support the theory stated in the stimulus ?
the only difference that I can identify is that answer choice A indicates a decrease in spending and answer choice D does not. D simply states that borrowed money is used only to purchase assets, ------> the only inference I can draw from this is that answer choice D has no effect on spending and therefore plays no role in causing a recession ?

Just want to know if I am on the right track ? if not further clarification would be appreciated.
Thanks

[Nikki Siclunov]

Hi Mkendz,

Thanks for your question. Indeed, the correct answer choice to this Weaken question must support the view that the recession was caused by high levels of household indebtedness:

indebtedness (cause) recession (effect)

The author suspects that indebtedness was not the real cause, because poor people don't have that much debt: rich folks do. But, if the middle class owed enough debt to cause a decrease in their spending, then household indebtedness could still be the cause for the recession. The error in the argument is that the author is focusing exclusively on rich and poor people (a False Dilemma of sorts), overlooking the debt carried by the middle class.

Answer choice (D) is in agreement with the author's position that the rich, who have the most assets, also owe the most debt: they accumulated the debt in order to purchase their assets. This observation is in line with the author's argument and does not weaken it.

Let me know if this clears things up.

Thanks!

[Mkendz]

Yes thanks so much ! After reviewing the problem again I realized why answer D is incorrect. I guess this stimulus was just difficult for me to grasp your explanation was very helpful.
Thanks again

[fg6118]

In LR Marathon p.12-47 #28, I was down to a and b and chose b. I don't quite understand why b is wrong and why a is right. I understand that we are to weaken the causal relationship (indebtedness did not cause recession) but I don't understand how/where in the stimulus we are told that decreased spending may be a cause of recession and how that would weaken the conclusion (indebtedness did not cause recession).


Thanks!

[Clay Cooper]

Hi fg,
Thanks for your question.

I think the stimulus implies that decreased spending may cause a recession in the second sentence, which describes how low-income household might, in a hypothetical situation where they carry most of the debt, decrease spending; the author states here that that is a possible cause of the recession: "high household debt levels could have been the cause of the recession..." if they had led to decreased spending. Thus we are told that decreased spending can cause a recession.

I think answer choice B is wrong because it speaks in absolute terms (value of debt is less than total value of assets) that don't necessarily translate to the relative terms in which our evidence is given (debt is "high"). I am not an economist, so I don't know whether total household debt can be high without necessarily being greater than assets; in any case, I think such knowledge is definitely beyond the scope of common sense and therefore shouldn't be brought in. When it is not, answer choice B does not directly bear on the conclusion and is less appealing.

Answer choice A, by contrast, provides a parallel example of the rejected causal relationship, just in a different income class. If the argument of the author is that high-income homes owed enough of the debt that the spending of other households was unaffected by their debt, and I think it is, then answer choice A disproves that and weakens the conclusion.

Does that clarify it a bit?

[fg6118]

Thank you, Clay. That was very helpful!

[FutureLawStudent]

Hi,

I had a quick question about the analysis. How did you translate the first premise “since money is not lent to those without assests” to “money is lent to those without assests all the time?”

I used the unless equation and translated it to “if money is lent then you have assests.” What am I missing? Thanks!

[Adam Tyson]

That wasn't a translation, FutureLawStudent, but was our Administrator's commentary on the weakness of the premise that money is only lent to those with assets, sharing the opinion that, at least in "real world" terms, that's just not true. Your translation using the Unless Equation was perfect! Good work!

[gen2871]

Hi, Dear LSAT masters:

Please help me to see the bigger picture here. I understand it is a typical "third person argument" that some theorists regard "household indebtedness causes recession."
household indebtedness recession.

and the rest of the passage is to counter this argument as the conclusion goes "the real cause must lie elsewhere" hence "not household debt recession. To weaken, don't we need to prove that it is exactly household debt that causes recession? how does finding an alternative reason/cause weaken the conclusion? The conclusion says something else, other than household debt causes recession, and answer choice says it is the reduced spending that causes recession?

I agree answer choice A is the correct answer (because the rest of the four dont even touch the hole). I see it as exactly household debt recession because it touches the point that middle income who owed enough debt + decrease spending recession, at least it is by part household debt that causes recession. Please help out here. Thank you in advance.