I wonder whether this is really that people are piling on debt or whether the sheer number of people who have access to credit isn't skewing these numbers. That article talks about what happened "the last time" ... but that was nearly 10 years ago, and a lot has happened to the credit markets since then, especially mortgages. People who weren't part of the sample back then now are: with the rise of the use of credit scoring has come a whole new crowd of people, mostly at the lower end of the economy, who are suddenly have access to credit. So maybe this isn't so much about what "the regulars" are doing (as though the behavior of debtors is a constant) but rather what has happened to "average" behavior with the arrival of large numbers of newcomers.
My personal feeling is that unsecured credit default should just be a part of doing business at the banks: if you roll the dice for high yield, and you're a big boy, you should get whacked now and again for it. If Citicorp sees too many defaults on their credit cards, they should blame the business head for being unprofitable, not "the consumer" for being imprudent. The WSJ article points out that defaults are more easily weathered these days, and I think that's a bright point.
Back to mortgages: home ownership is also at an all-time high; isn't that because in the past there were large groups of people who were technically "creditworthy" (i.e., could financially handle the servicing of a mortgage) but were still unable to secure mortgages for reasons like not having enough of a down payment to qualify or being redlined? Now if Fair Issac and Fannie Mae say you can buy a house, you can. That's got to be a big step forward in society.
/jordan