Wonder why the U.S. economy is in slow motion? No one questions that 70% of its make up is driven by consumer spending. So, take that 70% and reduce its effectiveness by all the outstanding consumer debt, currently $2.43 trillion in national credit card debt alone, include home equity lines of credit, minus first mortgages and you have the reason things are so stale. Discretionary spending is very, very limited. Why isn't the government talking about it? Because after bailing out the banks that hold most of that consumer debt with the tax dollars that Americans paid that could have gone to their own debt repayment, you would think Uncle Sam would be a little self-conscious about this increasingly taboo subject. Yet, there it is - the elephant in the room no one's talking about.
In Colorado, where 14.5% of the population is already using more than 50% of the credit available to them, personal debt counts significantly in the state's fiscal picture. While the national umemployment rate hovers at 9.4%, Colorado's has recently risen to 7.4%. That translates to 2.5 million residents without a job. And that means, personal debt could rise in the face of the recent federal government deficit crisis compromise to slash unemployment benefits.
So, here are three questions on this taboo subject.
1. Do you agree or disagree that consumer debt is a significant drag on the U.S. economy?
2. What do you think could or should be done about it?
3. Are you willing to leave things alone, let the economy bottom along for as long as it has to as consumers work their way out of debt?