U.S. Household Debt
Deeper and deeper we go... Historic data shows an ever increasing
household debt that seems to know no end. However, the debt service
(see below) has remained fairly constant. Data from The State of
Working America 2000/2001.
- Historical data: household debt, by type, as a fraction of
disposable (i.e. after tax) income
| Year | All
debt | Mortgage | Home equity loans | Consumer
Credit |
|---|
| 1949 | 31.9% | 18.5% | -- | 10.2% |
| 1967 | 66.9% | 40.3% | -- | 18.8% |
| 1979 | 71.9% | 44.7% | -- | 19.5% |
| 1989 | 84.6% | 55.5% | 7.0% | 19.8% |
| 1999 | 103.0% | 67.5% | 7.7% | 21.5% |
- Debt service: debt by itself is not a problem as it allows for
investment. What matters is how much one must pay to service the debt
and whether the payments encroach on other necessary spendings. Below
are historical data of minimum required payments on debts as a
fraction of disposable income: suprisingly, despite the mounting debt,
this has remained constant; it is not clear if the trend is
sustainable, though, given the seemingly unending increase of debt
level...
| Year | All
debt | Mortgage | Consumer |
|---|
| 1980 | 12.8% | 8.4% | 4.4% |
| 1989 | 13.4% | 7.6% | 5.8% |
| 1999 | 13.4% | 7.6% | 5.8% |