Ed Andrieski, AP
Statistically speaking, American households deserve a pat on the back for debt reduction over the past four years.
In reality, the worst ways possible have been used for the decrease, according to an article by The Atlantic.
In a time of crisis, there are a few ideal ways for a nation to overcome it.
“The ideal way for a country to deleverage would be for incomes to rise faster than debts,” said Matthew O’Brien, in his Atlantic article. “The second-easiest (but far from ideal) way would be for practically every household to default on their debt, forcing the banks to lower credit standards, which might encourage people to borrow their next batch as the economy improved."
The change has come in a combination of both for the negative, O’Brien said. As wages have stayed the same as well as low inflation, cutting debt is hard without trimming other spending elsewhere.
Even though large numbers of households have defaulted, there were not enough to cause banks to lower credit requirements.
- She paid for a family's groceries and got...
- Heavy reliance on US not sustainable,...
- Renovation Solutions: Three renovation...
- April 15 may be Tax Day, but Tax Freedom Day...
- Why do only half of Americans invest in stocks?
- Happiness research inspired one business...
- Did you file your taxes jointly or...
- Ask Mr. Dad: How to handle stress of going...
- She paid for a family's groceries and... 6
- Did you file your taxes jointly or... 4
- Finally, Congress OKs bill reshaping... 3
- European vacation as much as 25 percent... 3
- Heavy reliance on US not sustainable,... 3
- Happiness research inspired one... 3
- Why do only half of Americans invest in... 3
- Ask Mr. Dad: How to handle stress of... 2