By Christopher Matthews

The two-faced recovery soldiers on. One day, indicators like the Case-Shiller housing index give us hope that the economic recovery is finally gaining steam, and the next day the ISM Manufacturing Index shows the sector actually contracted in May.

Amid the confusion, however, some commentators see a fate much worse than a tepid recovery. News organizations from Bloomberg to Yahoo have been wondering whether the recent gains in the housing market are setting the stage for another real estate bubble. The reasons for this concern: home values are increasing far faster than wages, while retail sales and GDP growth seem to be accelerating faster than the fundamentals would allow. And if retail spending, home prices and economic activity are growing faster than worker paychecks, it means we’re taking on more debt — and at some point that will become an unsustainable situation.

It’s the same unsustainable situation, in fact, that characterized the run-up to the housing crisis. In the early 1990s, the average American’s debt load was 83% of his income, but by 2007 that number reached a staggering 130%. Americans compensated for stagnant wage growth by “using their homes as ATMs,” as the catch phrase has it, taking out more and more mortgage-backed debt with the belief that home prices would always continue to rise. And a reckless banking system was only too happy to oblige.

The Great Recession was supposed to have changed all that. In the wake of the financial crisis we read story after story of chastened Americans socking away more money in their retirement accounts, paying down debt and saving for their children’s educations. The national savings rate, which had averaged just 2.84% between 2000 and 2007, climbed above 6% in 2008.

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