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The American Debt Load Is Rising At The Slowest Rate Since The 1950s

 

DebtWASHINGTON — Everyone is aware that the US has too much debt, but what they don’t know is that the situation is improving, not getting worse.

The economy is slowly reducing its debt, by repairing the damage resulting from 10, 20, or 30 decades of excess.

For those wondering why economic growth has been lukewarm; it is because the economy is continuing to deleverage four-years after the recession. Additionally, it is difficult for any countries’ economy to grow if its citizens are focused on growing their savings.

Complete domestic – both private and public – debt as a portion of the economy has been declining for the last 12-quarters, after surging the decade before.

The quick rise in federal debt during Obama’s reign has distracted Americans from seeing the larger picture. Although the amount of public debt is worrisome, it’s not a big of a concern as the combined economy’s private and public debt.

Although there is an entire industry that has devoted itself to warn of the dangers related to too much public debt, there isn’t anyone telling Americans about the dangers of having too much private debt.

It was excessive private debt, not public, that caused the financial recession in 2008. As well, it was private debt (although some has now transferred to public debt) that is the reason behind the European debt crisis – Greece is the only country that has a conservative private sector and an excessive spending public sector.

As talks about the US federal deficit have become a hot topic, Americans have lost sight of the progress that has been made to bring down the total debt to a controllable level. The country is doing a lot better than people would think.

Actually, since the end of the recession in 2009, debt in the US has been rising at the slowest rate since the 1950s.

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Posted by on Aug 27 2012. Filed under Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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