John Lounsbury

There is No Household Debt Crisis

archman82011 - - -

I will start with a discaimer: I don't know the author and am not aware that I have read anything he has written before this.

The graph at the lead of the article supports the author's statement you criticize. The last data point (total household debt as a percentage of income) is almost exactly the same as 2002. You may feel that the graph is not valid or there are other factors to compare to that are better. You mention $900 billion in credit card debt. How does that compare to historic levels?

You state "What about the hundreds of billions of dollars in home equity extraction that occurred from 2003-2006? That money has been paid back?" The author's graph shows a slight drop in mortgage and consumer debt from 2007, but higher levels than 2006 and earlier. The implication from the graph is that some of the previous high mark debt has been paid off OR the drop represents defaults.

tcornellison - - -

I agree with your concern about real estate defaults. Although I have not double checked your numbers report, I have no reason to find them suspect. I don't see how they relate to the narrow focus of the article, except through the affects on personal debt. (See end of comment to archman - above - and to the author - below.) You may have intended to make a connection, but, if you had that intention, you stopped your comment too soon.

Carlafia Beach Pundit - - -

Your article is, as far as I know, factually correct, but I have not checked your sources. However, your conclusion is suspect because you have not included analysis of how defaults have affected and will affect the status of the consumer. Defaults impair a consumer for years to come. How resilient can an economy be if consumer debt is reduced by default rather than by retiring debt?

Now that I've succeeded in insulting what three people had to say, I'd better stop. Please note: I think you all have something worthwhile to say, but you haven't said it yet. I hope you come back with further comments to make your points more effectively. Thanks for indulging me.