USA Today has an article on consumer debt levels. Basically, consumer debt isn’t going anywhere fast. In 2008 household debt totaled $13.9 trillion. That was almost double the 2000 levels. In 2009 — after the collapse of the credit bubble, banks cutting back lending, tightening of lending standards — you know, after the last year — household debt level is down for the first time in ages. Well, sort of. Household debt is now down to $13.8 trillion. Whoo Hoo!
If this doesn’t scream that we’ve got a problem, then I don’t know what does. Oh, and all those economists calling for a 2nd half economic recovery? On the backs of what jobs and what income? We are a consumer driven economy. As long as the consumer is busy NOT getting debt paid down and NOT staying employed, I wouldn’t start singing Happy Days are Here Again anytime soon.
So, where to start? The credit card reform bill going into effect next year is a start. Anyone who has spent any time at all reading credit card terms figures out pretty quickly that the credit card companies have spent a huge amount of time figuring out ways to make debt almost impossible to pay down. If you haven’t read about interest rate increases (by sometimes 30% apr or more) just because the card company thinks it can, then maybe you should start by googling double cycle billing; but I wouldn’t recomend trying that before breakfast.