Macro view on debt

Posted on by Evan in Credit Crisis

If you’ve been a regular reader of “My Mind on Mortgages” over the years then you know that I am a big fan of the Economist magazine.  I appreciate their global perspective and use of economic theory in explaining current events.  From time to time they publish special reports on hot topics that are very good.  In this weeks issue they did a special report on debt.  Here are some links and some interesting excerpts:

–A Cultural Perspective: “The battle between borrowers and creditors may be the defining struggle of the next generation.”

–Consumer Debt: “At the end of the second world war in 1945 consumer credit in America totalled just under $5.7 billion; ten years later it had already grown to nearly $43 billion, and the party was just getting started. It reached $100 billion in 1966, $500 billion in 1984 and $1 trillion in 1994, or around $4,000 for every man, woman and child. The peak, so far, was almost $2.6 trillion in July 2008.”

–Digging Out: “If being able to borrow makes people feel richer (however illusory the sensation), having to repay the debt makes them feel poorer.“