The Homa Files

From the WSJ …

There seems to be a structural change in the American economy.

The relationship of household debt to income has proven unsustainable.

The ratio is normally somewhere below 100%, but in 2007 the debt ratio hit 131% of income.

It has now fallen to 122%, but at this pace it would take another five years to bring it under 100%.

The pre-bubble norm was 70%.

To get to this ratio again, debt would have to be reduced by about $6 trillion.

WSJ, The End of American Optimism, August 16, 2010
http://online.wsj.com/article/SB10001424052748703960004575427332237529948.html

This entry was posted on August 24, 2010 at 6:46 am and is filed under Deleveraging, Financial Crisis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.