The conclusion of this argument is that the cause of the recession is NOT that there was a lot of household debt. Why? Because though there is a way that high household debt could have caused the recession - by that debt being held by poor people, while rich people, though holding lots of assets, don't spend more and more - this particular arrangement was not the situation. (The argument explains that can't be the situation because who's going to lend money to a poor person!?)
Now we have to weaken this argument. Generally, to weaken an argument, we have to invalidate an assumption. So what's the gap here? If you don't see it, try this argument:
People say that icy roads caused the truckers to stop deliveries to LSATville.That could be true, the roads were icy, and if a truck slides off the road into a telephone poll, it could be real bad and thus truckers would not want to drive on such a road. But there were no telephone polls on the road to LSATville, so the icy roads must not be the reason the truckers wouldn't drive the road.
What's the problem? Couldn't there be another way that icy roads caused the truckers to stop making deliveries? Maybe they weren't scared of the telephone polls but they were scared of the ditches. We've all seen the show about ice truckers, right?
Similarly, just because we know that way X that household debt could have caused the recession (poor holding the debt, rich holding the assets and not spending more), does that mean that debt surely was not the cause? Maybe there's another kind of debt that would cause the recession. So, the assumption is that the poor holding the debt and rich holding the assets is the ONLY way that debt could cause the recession. (At the core of this, we're back to this fallacy: If X -> Y, and if we don't have X, we must not have Y. To fix this, we need that X is the only way to cause Y - i.e., poor holding the debt etc. is the only way that debt could cause the recession.)
(A) provides the alternate way that debt could have caused the recession: debt held by the middle class, and a reduction in that class' spending, and voila...recession!
(B) is tempting, but the argument doesn't require the debt to be higher than the assets for the debt to cause the recession.
(C) is also tempting since this is a complex problem. However, (C) provides weak information - they somewhat decreased their spending. Furthermore, and more importantly, if they decreased their spending for some other reason than the recession, that strengthens the argument, which concludes that the recession was not caused by high household debt.
(D) is after the fact - we want to know what causes the recession, now what folks do during one.
(E) is tricky - we don't care which category is most likely to affect the economy. We're interested in whether this category of debt did or did not do it!