Americans have tried to rebalance the family budget but have found it difficult to reverse the damage.
The survey showed that fewer families are carrying credit card balances, and those who do have less debt. The median balance dropped 16 percent, from $3,100 in 2007 to $2,600 in 2010. The Fed also found that the percentage of Americans who have no debt rose to a quarter of families.
Even though data from the Federal Reserve shows that Americans are carrying less credit card debt, it also shows that we’re worth 40 percent less than we were three years ago, and that more families are taking out more loans to pay for college, “leaving the median level of family debt unchanged.” Americans now owe more in student loans than they do in auto or credit card debt. I’m certainly one of those Americans, but I’m trying not to be.
So… when are we going to talk about the student loan problem? (Not necessarily the Billfold, but this country in general). Because it is a PROBLEM, for sure, one that appears to be getting worse by the minute, and yet…
@mouthalmighty (We may have a student loan column in the works.)
@Mike Dang: (That is magnificent, I look forward to it.)
@mouthalmighty Student loans is the next great bubble. Federal interference has caused colleges to treat loans like unlimited money, thus constant hikes in tuition and wild salaries. It has become a vicious cycle.
I’m assuming that all the wealth went poof when the housing bubble burst? Which I guess poses the question of whether that wealth ever actually existed in the first place, since it was just pretend housing bubble money. Kudos to everyone who managed to launder it into real money by selling their houses at the right time, or at least turn it into cash with which to buy nice things (that they now have to pay back to their HELOC, but probably that’s at rock-bottom interest rates, so!).
The terrible part is that every dollar used to pay down debt is a dollar not circulating in the economy, prolonging the recession (and keeping asset prices low). The Japanese experience is instructive.