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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Ilaine who wrote (116158)8/8/2001 7:17:20 PM
From: Thomas M.  Read Replies (3) of 436258
 
That is debt service, not debt. That reflects the benefits of the decline of interest rates from 15-20% down to 5%, which of course cannot happen from here. Most of the old folks who were bearish over the past 5 years were bullish in the early 1980s, because they realized that interest rates were too high, and would eventually decline and provide a big boon to the economy.

From 1980 to now, household debt has gone from 65% of disposable income to 105%, from 50% of GDP to 75%. Homeowners' equity has gone from 70% to 55%. Corporate debt has gone from 30% of GDP to 45%, and from 40% of revenues to 70%. All of these figures are at post-WWII highs.

Tom
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