I work in HR and Payroll. I can promise you there is no correlation between the economy and personal financial management. Poor personal finance skills cross all economic boundaries, from minimum wage earners to corporate big wigs. I've seen things that would make you cringe - corporate CFOs with multiple bankruptcies, employees with 13 - yes 13 - separate garnishment orders, people at all income levels taking 401k loans for revolving debts, employees using "bonus season" to spend 10x of their bonus amount on a car and then getting upset the following year because bonuses aren't as good.
No matter how much you make, spending more than that is a recipe for personal disaster. A downturn in the economy is just a point where personal finance decisions really make or break you. An unexpected large expense or loss of income when you're living paycheck to paycheck is a financial breaking point for many folks. When that happens many people lash out, blaming everyone and anyone except themselves.
All through the banking crisis, I never heard of a bank that forced someone to take that large mortgage, or to buy that $75,000 pickup truck or $100,000 BMW. There was plenty of fraud, yes, but usually by mortgage brokers getting questionable loans approved. There is no such thing as foreclosure or repossession if your payments are current. Yes, bad things happen to good people, but many good people also cause themselves major problems by constantly living in the moment.
The issue IMO with student loan debt is the easy access to money with no linkage between the amount borrowed and the future potential to pay it back. What could possibly go wrong by giving an 18 year old a blank check and encouraging them to study whatever it is they "want to do" as opposed to what will support them in the lifestyle they want to live in - whatever that may be.
I'm sorry but not a single one of your charts links or data correlates that people pay down debt in a good economy...
Factually speaking, debt is used as a vector for economic growth for both the public and private sectors...
ThIS is how money enters into an economy after a recession, and how it typically grows.
When markets are overvalued and debt finally catches up to the most irresponsible, we move into a recession. But when is debt accrued? Who is handing out debt in a poor economy? So it would be paid down in a good one?
The responsible people you mention dont lose their homes and cars during recessions. That's your prize for being smart in a good economy