>The NYT reported today (4/4/2000) that:
>
> The problem is that consumers have little cushion to
>soften the blow of layoffs. Many
> of their personal balance sheets are creaking under a
>load of debt, and savings are
> close to nonexistent. During the 90's, Americans piled
>on debt. Consumer debt as a
> share of the gross domestic product now stands at
>close to 71 percent, a new high,
> and up almost half from the early 1980's. As a share
>of personal income, household
> debt has risen to 85 percent, also a record.
>
>Does anybody know: does consumer debt include mortgage debt?
Depends. Credit card debt is often referred to as "consumer installment debt," but "consumers" also take out mortgages, so the words are a bit imprecise. But this is all rather murkily worded:
> Also, what does the last sentence mean: "As a share of personal
>income, household debt has risen to 85 percent, also a record".
since debt isn't part of personal income, so calling it a "share" makes no sense. It should be "as a ratio to personal income," but maybe the NYT editors thought ratio too difficult a concept for their readers.
At the end of 2000, household debts of all kinds equaled 106.7% of after-tax income (that's a ratio); mortgages were 70.9%, and "consumer credit" (credit cards, mostly) was 22.1%. All these are records, but records have been set almost every year since they started publishing the numbers.
Doug