October 15, 2012
WHAT DID 1984's HIGH LEVELS OF INDEBTEDNESS GIVE US OTHER THAN A QUARTER CENTURY OF GROWTH?:
U.S. families' debt loads decline to pre-recession levels (Don Lee, 10/15/12, Los Angeles Times)
The trivial nature of the "credit binge" is illustrated by how easily the debt was wound down.Overall, households today are paying less than 16% of after-tax income to cover debt payments and lease obligations, the smallest share since 1984, Federal Reserve data show. [...]A massive number of foreclosures and a new frugality on the part of many households have helped reduce liabilities. Now the long process of shedding debt seems about over, and that alone should benefit the economy.With less debt weighing them down, consumers are feeling more upbeat today than they have in five years, according to the Thomson Reuters/University of Michigan survey of consumers this month. And that could translate into a little more spending and risk-taking.
Posted by Orrin Judd at October 15, 2012 3:27 PM
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