Debt numbers near Depression stats

What others say

Posted: Tuesday, September 20, 2005

Americans are in debt and saving at rates comparable to the Depression; the economic toll could be significant ... not only for individuals but also for the entire American economy.

Americans have accumulated $11 trillion in debt, according to a recent Associated Press story. Most worrisome: Americans owe more than $800 billion — or $7,200 per household — in credit card debt. ...

Likewise, many Americans don't have a financial cushion for unexpected expenses. The average American saves less than $1 of every $100 earned — the lowest saving rate since the depths of the Great Depression. ...

An added concern is that much of the debt in recent years has been accumulated by lower-income families and middle-income families, who borrowed to maintain a better standard of living as wages stagnated. If millions of Americans suddenly can't pay their bills, that would take a toll on banks and other businesses, which might have to reduce their work forces — leading to a downward economic spiral. ...

For individuals, the heavy debt burden could mean a less comfortable retirement. Seniors might be forced to work well into their 70s. ...

The task for government will be to support policies that encourage individuals to save and invest. But it's uncertain whether Americans are in the mood for a cultural shift — from one based on overspending to one that emphasizes saving for tomorrow.

— The Greenville (S.C.) News

Sept. 9

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