Thursday, January 8, 2009
U.S. household debt decreases
The Wallstreet Journal is reporting that the U.S. household debt declined in the third quarter of 2008 for the first time since The Federal Reserve started tracking it in 1952. The article states that the consumer spending groweth also declined for the first time in 17 years, painting a grim outlook for the future by focusing on 2 families that have been forced to save due to job losses. Being a Wall Street article, it is written as if the cost cutting and savings are a bad thing and we are heading back to the middle ages. One family is even quoted as having bought a calf, which they plan to slaughter and eat the meat! However, I believe that the end of consumerism and return to saving is a good thing as people get out of careless spending sprees and start taking responsibility for creating a financially secure future for themselves. If this article titled "Hard-Hit Families Finally Start Saving, Aggravating Nation's Economic Woes", is trying to suggest that these hard hit families go out and start spending to save the economy, they are suggesting bad advice. Yes, there will be a lot of pain ahead, but if we continue to get bigger and bigger as a nation of debters, the implications will be far greater. According to the Treasury Direct our national debt as of 1/6/09 stood at a mind-boggling $10,638,425,746,293.80!!! So getting into more debt to solve a crisis of debt is not the answer.