21 December 2008

Getting Debt Under Control

As individuals, we often represent a microcosm of the country. In 2006, the US savings rate went negative, and it remained anemic for quite a while thereafter. At the time there was some beard-wringing; but ultimately some argued that this was nothing to worry about, because our stocks and houses were worth so much more. The obvious problem with that logic has become clear: it doesn’t take into account gains or declines in asset value. So when you have a sharp and sudden decrease in those asset prices, your negative savings rate is even worse than it would appear at face value.

continue reading... » 0 Comments