Just the Facts, Ma'am: A Compendium of Liberal Fiction Message Board

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Politics : Just the Facts, Ma'am: A Compendium of Liberal Fiction

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To: Lazarus_Long who wrote (32938)	4/21/2005 1:32:41 PM
From: Oeconomicus	Read Replies (1) of 90947

And the fact that debt on homes now exceeds equity? Actually, it doesn't show that at all. Equity is still mid-50s percent (of whatever value measure they used). The debt line is percent of GDP, so it is not directly comparable to the equity line. It's a misleading graph because it implies that debt burdens have doubled relative to income (GDP being a national measure of income) in just two decades, which is not true at all, while net assets of homeowners have declined (ignoring, of course, all other assets). The reality is that the "financial obligations ratio" for mortgage debt has risen only from about 8.5% in the early 1980s to 9.5-10% the last four years. Total debt service ratios for US households have also risen a relatively small amount, from 11% to 13%, since the early 1980s. federalreserve.gov Made for an alarming looking graph, though, didn't it? Think that was the intent? ;-)

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