American households are $13.8 TRILLION IN DEBT, compared with $14.3 trillion output of the ENTIRE US economy. YIKES!
According to The Big Picture blog:
“Despite recent frugality, consumers have barely dented their debt load. The Federal Reserve will offer a fresh peek at that mountain on Thursday, when it releases its “flow of funds” data for the first quarter.
By the end of 2008, households were on the hook for $13.8 trillion in debt — nearly matching the $14.3 trillion output of the entire U.S. economy, not adjusted for inflation, that year.
Households are shedding debt; they’re just not doing it very quickly. They owed roughly 130% of disposable income at the end of 2008, down only slightly from a record 133% in the first quarter of 2008.”
I’ve been digging through research papers trying to find accurate measures of household balance sheets during the Great Depression to try to develop a reference point for our current bubble games. The trouble of course is that much of our new toxic instruments like Alt-A mortgages and massive amounts of commercial real estate debt really didn’t have a big impact during the Great Depression.