In debt we trust
The New York Times launches a series on debt in America. Gretchen Morgenson, one of the nation's smartest business reporters, is the lead author. If you think the credit crisis/mortgage crisis/mental recession is about Wall Street and deadbeats, you're missing an enormous cultural and social shift taking place in this country.
Here are a few stats from the first story:
Today, Americans carry $2.56 trillion in consumer debt, up 22 percent since 2000 alone, according to the Federal Reserve Board. The average household’s credit card debt is $8,565, up almost 15 percent from 2000.
College debt has more than doubled since 1995. The average student emerges from college carrying $20,000 in educational debt.
Household debt, including mortgages and credit cards, represents 19 percent of household assets, according to the Fed, compared with 13 percent in 1980.
Even as this debt was mounting, incomes stagnated for many Americans. As a result, the percentage of disposable income that consumers must set aside to service their debt — a figure that includes monthly credit card payments, car loans, mortgage interest and principal — has risen to 14.5 percent from 11 percent just 15 years ago.
By contrast, the nation’s savings rate, which exceeded 8 percent of disposable income in 1968, stood at 0.4 percent at the end of the first quarter of this year, according to the Bureau of Economic Analysis.