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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: Softechie who wrote (34733)	9/9/2001 4:58:17 PM
From: Teri Garner	Respond to of 37746

American consumers hit $7 trillion debt wall But deep recession threatens economy if they curb their free-spending ways William Walker WASHINGTON BUREAU WASHINGTON - Think of the American consumer as someone clinging by his fingertips to the edge of a cliff, weighed down by personal debt and buffeted by the winds of an increasingly stormy economy. Soon, many may let go. If consumers go crashing down and a mountain of debt caves in on them, leading economists say the U.S. economy would be buried in a deep recession, with Canada and much of the world not far behind. Desiree De la Rosa certainly knows the feeling of trying to hang on. Like millions of other Americans, she spent and spent, piling credit card debt on credit card debt, until she hit rock bottom. De la Rosa, 23, of San Antonio, Texas, had $13,000 (U.S.) of personal debt, six different credit cards, a car loan on a Chevrolet Cavalier, $450 a month rent and a student debt of $50,000. All that on a $27,000 annual salary. (All figures are in U.S. dollars.) A family violence counsellor, she has struggled to get out of debt hell. Gone are the spending sprees on clothes at the local mall. No more slapping down her card to pay for friends' dinner and drinks when they were out on the town. If she doesn't have cash, she ain't buyin'. ``I was juggling debt. I'd skip paying one credit card and pay another. Then with the penalties and 21 per cent interest, by the time I made the minimum payment, the balance never went down, it went up,'' she told The Star. ``But I did that all the time. I got a new credit card with a $2,000 limit and maxed it out in a few months on clothes and going out to eat. I looked at these cards as a source of income. It was like it wasn't a tangible reality that I was going to have to pay them back.'' De la Rosa's experience is not unusual. The non-profit National Foundation For Credit Counselling reports that as of this year, the average American seeking help with debt makes $29,425 annually and has accumulated $23,184 in total personal debt. After the longest period of economic growth in American history, it appears the good times may soon be over. But American consumers don't seem to get it. They're still spending. U.S. job layoffs have topped 1 million this year. Just yesterday, the U.S. government released jobless numbers much worse than economists had expected: 113,000 jobs were lost in August alone, bringing unemployment to its highest level in four years. Experts agree that continued robust consumer spending - which drives two-thirds of the U.S. economy - has almost single-handedly kept America out of recession. ``Certainly if there's a decline in consumer spending of almost any amount, it would push the U.S. economy over the edge,'' said University of Delaware economics professor James Butkiewicz. But as Americans continue to spend, they have racked up record levels of consumer debt - more than $7 trillion, a figure almost incomprehensible in its enormousness. Think of it this way: If those debt dollars were kilometres, they would amount to 42,000 round trips from Earth to the sun and back. thestar.com.