July 30, 2011
BAD NEWS: Americans Are More Indebted Than The U.S. Government. “While government debt sits at 94 percent of national revenue, U.S. household debt sits at a whopping 107 percent of personal income. The household balance sheets of Americans are in worse condition than anytime since the Great Depression. The ratio of household debt-to-GDP is greater than anytime since 1929. And while we all are trying to comprehend a poorer nation, many American’s have not yet comprehended their own personal poverty.” There’s a lot of denial out there.
UPDATE: Several readers point out that Americans’ mortgages are secured by tangible assets pledged as security, which is different. And reader Rosie Moore emails:
As a happily debtless person, I read the Wimpy piece while rolling my eyes. So true, yet the current administration (and state/local cohorts) are preying upon those of us who’ve worked hard to build a nest egg. The piece should therefore be amended to read, “In doing so, such investors build an engine through the miraculous power of compounding interest…..and every level of government then robs much of their gains through high capital gains taxes, estate taxes, punitive deduction rates for charitable contributions, irrational inflation of home values, etc.”. Don’t get me wrong, I’m happy to own two homes outright and have a financial cushion to sustain me in retirement or emergency, but all levels of government are even happier that I’ve been “responsible”. I’m buying more government than I want or need to support the Wimpies, whose votes have been bought with politician promises they knew they’d never pay. That’s gotta change!