Household Debt Drops for first time in 50 years
December 23, 2008 by Michael O'Brien
For the first time since 1952, the amount of debt carried by the average American household has dropped.
This reduction in debt, more than anything else, is real evidence of a change in American spending habits and an indication that most people are re-focusing on the important staples of life which are paid for in cash and foregoing charge accounts and large purchases paid over time. The report does not indicate what percentage of the drop is attributable to the reduction in new car financing but, according to anecdotal evidence from my clients in the car industry, it must be a tremendously high component.
Bankruptcy is often cited as providing a "fresh start" to individuals and small business owners. I like to think of the bankruptcy process as the first step towards economic recovery. It may be one small step in the National economy, but every day I see the very large step forward this process provides to the average American household.
In: Economy