Posted on 07/09/2015 1:39:58 PM PDT by SeekAndFind
Greece may be dealing with a debt crisis, but the average U.S. household may have more to lose.
The fate of debt-troubled Greece is now only days away from being decided. Greek Prime Minister Alexis Tsipras requested bailout funds on Wednesday, promising to submit reform proposals later this week. Either the country will agree to severe austerity measures in exchange for a reprieve from its lenders or will have to exit the eurozone and strike out on its own.
Whatever happens, the average American may be worse off than Greece. Here are three ways to look at it:
1) Americans actually have more debt relative to income earned
Between its government and its banks, Greece owes 323 billion euros to creditors and its debt-to-income (GDP) ratio is 177%, according to Trading Economics. In other words, Greece owes 1.77 euros for every euro it earns. The average U.S. household, by comparison, owed $204,992 in mortgages, credit cards, and student loans in mid-2015 on a median household income of $55,192, according to data compiled by Sentier Research. This translates to a debt-to-income ratio of 370%, which is much worse than Greece!
In addition, indebted U.S. households carry an average credit card balance of $15,706, according to NerdWallet. Now consider that on average Greece pays only 2.6% of GDP in interest on its debt, according to estimates by think-tank Bruegel cited by The Telegraph. By contrast, the national average interest rate on a U.S. credit card is 15%, according to a report by CreditCards.com, which means $2,355 of annual interest on a balance of $15,706 and 4.2% of median income. This spikes even more sharply on higher interest credit cards, or in the case of a missed payment, which can lead to nearly 30% in interest and therefore 8.5% of median income.
(Excerpt) Read more at fortune.com ...
I guess no one who is reporting on this has ever been to Europe in the summer?
I have no doubt that all concerned will find some way to kick the can down the road at least until September. Nothing is more important to a German or French bureaucrat than their 6 week summer vacation.
Am I the only person who thinks that comparisons between personal debt and that held by a state are totally irrelevant? For example, only 1/4 or less of personal debt is unsecured, but how much of Greece’s debt is backed by a tangible asset?
Just a silly article.
RE: Nothing is more important to a German or French bureaucrat than their 6 week summer vacation.
Do most of them go into debt to pay for their summer vacations?
Detroit, Puerto Rico, and Greece. They’re small and broke, and thus in trouble.
We’re large and broke, so our moment of reckoning is farther down the road, but inevitable.
The writer is comparing apples and oranges — Americans’ *individual* debts, to Greece’s *gov’t* debt.
It’s not a valid comparison.
Many Greeks still know someone who knows how to grow vegetables and has a tiny village garden?
3 reasons the average American may NOT be worse off than Greece
Wife an I are working off the debt now. We currently are at about break even if we sell the house and then pay off our debts. This of course assumes current housing prices so that is really only a false sense of security. That is why we are paying everything else off just as fast as we can.
Still working on building up the prepper equipment and stores. We just got a reloader at an estate sale at a very reasonable price. I just need to continue to work on long term food stores.
Hopefully the financial crisis / collapse will hold off for another 4 to 5 years. At that point, we can sell the house, by some land further out, build our own hobbit house and go off grid and have our own self sustaining hobby farm.
Deceptive title. Private citizens are always going to be in worse shape than governments that have armies and navies. But right now, Greek private citizens can expect more pain than we do.
Stupid article. Completely irrelevant comparisons.
Or citizen.
Well, it is a lame comparison. But, here's a thought: Debt held by a state can take down the prudent individual (bank closures, bail-ins, currency devaluations, monetary collapse), but debt held by an individual doesn't affect the state in the same way.
So many of the things you read on these so-called “Financial” pages are completely wrong. It is no wonder the population is so poorly informed. The media types themselves are poorly informed......and incredibly biased.
seriously? i carry an average credit card debt of ZERO.
Therefore, You’re not the average US household.
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