| Ail said:
There's several reasons for this : 1- Foreclosure , the huge majority on the household debt is in mortgage, as people go in foreclosure their mortgage gets wiped out... 2- No more refinancing to get money out of your house ( which increases debt). 3- Stricter borrowing policies, it is actually very hard these days for people to get mortage approved or get loans if they have less than pristine credit score. As the majority of people keep paying their existing debt, and you reduce the capacity for people to take on new debt, overall debt goes down.. 3- Some slight reduction in credit card debt ( like I said some americans took advantage of the latest stimulus to reduce their debt and are still doing this right now which is one reason for the weak economy, even if for the long term it is a good thing).
The reduction in credit card debt is good for the future. The dificulty to get mortgage not so much because people still have to pay to have a roof over their head one way or another so that is not helping the economy.. |
Just curious, but how did the stimulus have an effect on credit card debt when no one in the general populace got money from the program? Why would this stimulus have effected said debt when every other stimulus pushed (twice under Bush) no one to pay down their debts?
Back from the dead, I'm afraid.
