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And in part because of the high rate of mortgage defaults, the overall consumer debt burden has been dropping.
The most important now is the U.S. consumer debt burden and the accompanying housing bubble.
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But the employment data do suggest an economy that is slowly healing, an economy in which declining consumer debt burdens and a housing revival have finally put us on the road back to full employment.
That interest rates are lower has not led to consumers reducing their debt burden.
Now that the asset boom has burst, consumers face an extraordinary debt burden that will inhibit robust economic growth for some time.
Japan had a high savings rate for years but has suffered dismal growth over the past two decades.In the short term, a simpler explanation may be that a low savings rate has left American consumers with a heavy debt burden.
The fear was that the increased burden of consumer debt would make even a small rise in interest rates bear down heavily on spending.That worry is all the greater now, as the bank contemplates a similar move.
And many Britons carry a heavy burden of consumer debt as well as their mortgages.Lenders and rating agencies are heartened by their models, which show that it would take a combination of higher interest rates and falling house prices to make a worrying number of mortgage loans go bad.
Do you think the 2005 bankruptcy bill helped contribute to the unsustainable debt burden many consumers now face?
Banks have been forced to hold more capital and low interest rates have eased the debt burden on consumers.
Moreover, the price of homes can fall, whereas debt is fixed in value.In general the euro area is much less burdened with consumer debt than America.
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CEO of Professional Science Editing for Scientists @ prosciediting.com