Total US Household Debt at Lowest Level in Seven Years
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  • Jacksonian_Libertarian

    Declining debt levels isn’t a Green Shoot, instead it’s an indication of continued deflation and economic contraction. When the economy is expanding, levels of debt increase as consumers and businesses, buy and hire.

  • Kavanna

    And the deleveraging is nowhere near finished. The debt-to-income ratio needs to drop much further to get back to historical norms associated with good growth. The best estimates indicate that deleveraging is about half finished, and froth has reappeared in some areas (high-yield debt AKA junk bonds, real estate, stocks). The Fed is belatedly aware of it to an extent, but is still trying to stimulate the debt-driven growth model — it’s in a bind: it’s too much debt that got us into this mess.

  • Rick Caird

    Debt is debilitating. If someone has too much debt, the minute something goes wrong, it is difficult to recover.

    Debt reduction is a smart move. It is also a necessary move for an economy that is uncertain. For decades, we increased our GDP by moving demand forward via debt. That had to stop sometime and we are seeing that now.

  • Arch

    Right now money is so cheap, we decided to refinance our mortgage and got a 3.25 % APR loan that dropped my payment by over $500 per month. Yesterday, my wife’s 12 year old X5 died and she replaced it at 0.74% APR.

  • drkennethnoisewater

    How much of this deleveraging has been personal bankrupcy wiping out debt vs. actual saving of economic surplus?

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