U.S. Household Debt Is Totally Out Of Control

Decline of the Empire ^ | 30 November 2012

[Lorianne]

We have a stunning chart today which illustrates why taking on boatloads of student debt is not a good "investment" for most young people.

(chart)

JFC! (See here if this acronym is new to you).

The New York Fed has updated the household debt numbers for Q3:2012. Read it and weep.

In its latest Quarterly Report on Household Debt and Credit, the Federal Reserve Bank of New York announced that in the third quarter, non-real estate household debt jumped 2.3 percent to $2.7 trillion. The increase was due to a boost in student loans ($42 billion), auto loans ($18 billion) and credit card balances ($2 billion).

The Quarterly Report on Household Debt and Credit is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative random sample drawn from Equifax credit report data. During the third quarter of 2012, total consumer indebtedness shrank $74 billion to $11.31 trillion, a 0.7 percent decrease from the previous quarter. The reduction in overall debt is attributed to a decrease in mortgage debt ($120 billion) and home equity lines of credit ($16 billion), despite mortgage originations increasing for a fourth consecutive quarter.

“The increase in mortgage originations, auto loans and credit card balances suggests that consumers are slowly gaining confidence in their financial position,” said Donghoon Lee, senior economist at the New York Fed. “As consumers feel more comfortable, they may start to make purchases that were previously delayed.”

[Lorianne]

[5thGenTexan]

One thing ruining the salary average for bachelor degrees is the huge jump in degrees in studies that are diluting the sample. Those people end up working non-degree jobs much of the time, where people with real degrees do pretty well.

[Democrat_media]

You subsidize anything be it healthcare or College education with government loans and grants and you get those kind of skyrocketing costs. Again government creates problems and the democrats’ solution to the problems they created is more government.

If you had kept government out of Education and healthcare you'd have lower prices as you see in consumer electronics.

Hey dumb liberals you vote for democrats so you vote for higher prices and to become slaves of the government

[RegulatorCountry]

I paid off my college loan over a decade ago. Really working to eliminate any debt otherwise, too. Only have a mortgage, $50K to go. No credit card debt, no auto loan.

I guess I’m a sucker and a fool. My gut tells me to rid myself of it though, strongly, so that’s what I’m doing.

[PGR88]

Much like housing debt - I believe a lot of this “student loan debt” will be proven to be fraudulent.

It is made on fictitious names for bogus coursework. Certainly, many borrowers (but not all) are getting the money with no intention of paying it back.

The Government is giving away “free” money. There will always be plenty of takers.

[TheRhinelander]

My biggest is my mortgage. No credit card debt and no student loan debt. If I take out loans it’s against my 401k so I get the interest. The exception will be my car loan in the Spring to get my new Dodge Challenger.

[Paladin2]

"I guess I’m a sucker and a fool."

Not being a debt slave is a better way to live.

[NEMDF]

Congratulations. You are doing well!

[cripplecreek]

Have no fear. Comrade Obama will appoint a household debt czar to draw up manageable household budgets for all of us.

[Peter W. Kessler]

Not at our house.

We have a mortgage and...

we have a mortgage.

Period.

[Cementjungle]

No problem, because any day now Obama’s going to forgive everyone’s tuition loans (and make the “rich” pick up the tab).

[hinckley buzzard]

Total consumer indebtedness shrank 74 billion dollars. That is not exactly "Totally out of control." Got to watch out for misleading headlines.

[Vermont Lt]

What exactly is a “real” degree? I know art students who make we’ll over $80k. But that would be considered by most to not be a real degree. Or do you mean the online degree mills?

Earning has more to do with the person than the degree.

[5thGenTexan]

By real degree I mean something that is marketable. Not one in something like transgender studies. The “studies” degrees are a the rage now.

[trebb]

I paid off my college loan over a decade ago. Really working to eliminate any debt otherwise, too. Only have a mortgage, $50K to go. No credit card debt, no auto loan. I guess I’m a sucker and a fool. My gut tells me to rid myself of it though, strongly, so that’s what I’m doing.Even being essentially debt-free, I have concerns for my and the wife's future due to all the uncertainty and the fact that I moved all my retirement investments into money markets a while ago to protect the principle when the market trashes again - can't afford a third hit. Many folks who have less than a quarter of what we have saved up are oblivious to the reality of being retired on a fixed income with insufficient resources. Right now, the math says we'll be OK, but will have to curb a lot of discretionary spending - the math may change.....

[RegulatorCountry]

Funny, it doesn’t feel like it. The more frugal I am, the more expenses increase to absorb the freed up income. Feels like I’m going backwards. I look back on the peak years of owning my own business and it seems like a dream, hitting the restaurants and bars every night, no money worries whatsoever, could buy most anything I wanted and still have substantial savings. Sailed right through 9/11, it was a record year. Started sensing something wrong about 2005, started reining in. Muddled along doing OK, then 2007 was an awful year, customer buyouts and bankruptcies, customers started getting hinky, slow pay, expensive nitpicks and attempted chargebacks, followed by 2008 when work in the pipeline just ... stopped. I had to shut down, next to nothing coming in and thousands going out. Took a job with a former customer and have been there ever since.