Consumer Debt
If you look at the United States
and their national debt, one can easily come to the conclusion that the US is
being weighted down buy its governments debt. Some sources are saying the US national
debt is around nine trillion dollars. If you look at what the US's consumers
debt load you will find an also surprising over 400 billions dollars. It's
of no wonder that a nation that does not control its debt on the national level
has problems on the individual level.
While some
figure that a personal debt helps the economy, while others figure it hurts
the economy. The thought behind debt being good for the economy is that if it is
easy to obtain credit than this increases the demand for consumer products thus
increasing the nation's productivity. You can borrow money now to build that
addition onto your house that otherwise would take 10 years for you to save. So
the productivity happens now, not 10 years down the road. There is also the thought
in this example, that if the real estate at the time is fairly healthy and
moving along that the price to pay for the addition now would be perhaps the
same relatively as paying for it in the future. A $50,000 addition now may cost
$80,000 10 years from now to have done, which you would end up paying with interest
if you borrowed $50,000 now and you would have to wait 10 years to enjoy
it if you built it 10 years from now. Regardless if you have a large debt to pay,
it hits you personally. It is ultimately you that owes the money back to your
lender. Often this has resulted in frivolous spending thus the growth of the
debt consolidation/ counseling industry. So many people have spent beyond their
means that living with credit card debt or any unsecured debt just seems to be
the norm.
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