Tuesday, February 07, 2012

Some Good News for a change

US household debt as % of gross disposable income
quarterly, seasonally adjusted
 Household debt is coming down. The exceptional rise at the end of the Bush administration, which no doubt contributed to the financial crisis, is being corrected toward the long term trend.

The bad news is the long term trend of increasing household debt as a percentage of gross disposable income. That trend should be halted and reversed for a while to bring debt to income more into balance with historical levels and with levels which can be maintained. It is time to get away from the Macmansions, luxury vehicles, and conspicuous consumption that market the 90s and 2000s.

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