tag:blogger.com,1999:blog-6616959642391988608.post8782069326021811976..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Household financial burdens continue to decline, and that is goodScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-6616959642391988608.post-25683861621241654862010-06-23T20:04:08.220-07:002010-06-23T20:04:08.220-07:00CFP, EA: Consumers and businesses are deleveraging...CFP, EA: Consumers and businesses are deleveraging and reluctant to borrow, but our government is quite eager to borrow these days. It is not unusual at all for government borrowing to rise at times that private sector borrowing declines. The problem, of course, is that government tends to use borrowed funds very inefficiently (if not corruptly), and that squanders the economy's growth Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-85125818531347590882010-06-23T07:53:55.088-07:002010-06-23T07:53:55.088-07:00Mortgage and consumer debt is at least 1% of incom...Mortgage and consumer debt is at least 1% of income higher than in 1983 and 1993 - similar points in the business cycle to where we are today. On top of this, inflation was reducing debt burdens in those earlier years. I don't think that consumers are finished deleveraging.<br /><br />As far as absolute levels of debt are concerned, this is a very difficult number to analyze because every Charleshttps://www.blogger.com/profile/00607057013050715435noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-80075452313305845152010-06-18T12:21:55.809-07:002010-06-18T12:21:55.809-07:00Scott,
I believe that you've done a great job...Scott,<br /><br />I believe that you've done a great job showing how the debt payment burdens are reasonable and not a threat to the economy. (I really enjoyed the article showing household's fixed and variable assets and liabilities. It countered very nicely the argument that rising interest rates would crush consumers.)<br /><br />However, that being said, there has been a dramatic CFP, EAhttps://www.blogger.com/profile/01745165113059985912noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-88154720143214629602010-06-18T12:12:26.770-07:002010-06-18T12:12:26.770-07:00On the face of it, lower debt burdens are exceptio...On the face of it, lower debt burdens are exceptionally good news. Statistics can, though, be deceiving. I hope not in this case, but it would be interesting to see the historical numbers for different income levels. If the reduction is largely due to the wealthy paying off mortgages and boat loans, that's not quite as helpful. That's not to minimize the trend, it is certainly good randyhttps://www.blogger.com/profile/16368254229927808998noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-44901279016451306032010-06-17T15:06:15.196-07:002010-06-17T15:06:15.196-07:00Household Debt service to GDP is now 9.46% the low...Household Debt service to GDP is now 9.46% the lowest since 2nd qtr 2001.As a point of reference it was 8.8% in 1990. The high was 10.28% in the 4th qtr 2006.broderohttps://www.blogger.com/profile/12296214283216386700noreply@blogger.com