While I was hanging around on Yahoo Finance watching my stock portfolio bottom out, I did notice an article that looked encouraging at first glance. It said that US consumer debt has dropped a bit for the first time on record. i.e. for the first time, since they started tracking consumer debt, it has dropped. Now this should be good news that Americans are finally realizing that the future pain that debt gives them is not worth the quick satisfaction of a 50 inch TV set or something.
Is Declining US Debt Always Good News?
However, are Americans cutting debt by choice. It is hard to believe right now, especially in the holiday season. Actually, credit card companies are putting the squeeze on consumers, and falling debt levels may not be the consumer’s choice, but the fact that their credit limits have been sharply dropped.
And even though consumer debt has gone down by less than 1 percentage point, Americans net worth has declined by over 4 percent. Mortgage debt has also decreased, but it may be because many Americans have given up on their mortgages, and others cannot get a loan in this tight credit market.
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