via WSJ
Source:
What a Penny Saved Costs
SUDEEP REDDY
WSJ, JANUARY 6, 2009
http://online.wsj.com/article/SB123120956010956387.html
Consumer Credit outstanding fell $14.8b in Sept seasonally adjusted, almost $5b more than expected and marks the 11th month in the past 12 of declines. At $2.456T outstanding, it is 4.9% below the record high in July '08. After a flat reading in Aug, (didn't fall b/c of the CARS program), non revolving debt outstanding fell by $4.9B. Revolving (mostly credit cards) balances outstanding fell by $9.9B. To fully put into perspective today's data, look at the current level of consumer credit (doesn't include mortgages, the biggest chunk of consumer credit) relative to GDP. As of Q3, it totaled 17.2%...
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January 7th, 2009 at 10:16 am
Bah! Ridiculous. Those calling “Frugality Trap” when the savings rate is 0-2% are absurd! If THAT is really, the problem, then I can assure you that THAT is NOT the problem. If our economy can’t survive with a savings rate of 2% then it’s not the savings rate that is the issue; it’s our foundation.
January 7th, 2009 at 10:38 am
Good point zebov. At 2% that would get you what, one mortgage payment if your laid off?
January 7th, 2009 at 12:03 pm
If you want people with middle or lower incomes to spend more, you have to pay them more. Our current problem is all the money piled at the top. How much of a couple of billion can you really spend?
January 8th, 2009 at 2:16 am
I’d love to see another graph aside those two — median wage since 1980.