5 ms·
U.S. Consumer Debt / U.S. Population = $43,100 per person
- simon_ 16y agoThis has to be mostly mortgages, which makes it a little misleading.
- yummyfajitas 16y agoWhy is it misleading?
- rdl 16y agoGenerally, mortgages are an amount less than an asset someone has. It would be kind of absurd to consider a person with a $500k house and $50k in outstanding mortgage to be worse off than a person with $0. Mortgages also generally (depending on the state) are non-recourse; if your mortgage is for more than the property is worth, you can hand in your keys and walk off with no additional liability. I agree from a cashflow perspective, a mortgage even if you have substantial equity can be bad, but most people don't get into debt trouble from mortgages, unless they got some kind of absurd mortgages for close to the value of the property, resetting ARMs, and fundamentally have more house than they otherwise would have purchased. True, a lot of people did this, but it's a historical anomaly. But I'm sure you knew all that and were just trying to make a point :)
- yummyfajitas 16y agoSo it's misleading because they listed debt rather than net worth? I'm not sure "misleading" is the right term - I'd use "a correct number, properly labelled, but which answers a different question than the question rdl wants answered". Incidentally, I'm not sure why mortgage debt is more misleading than other debt. If I have $500k in the bank but owe $50k on an auto loan or credit card, is that somehow worse than owning a $500k house with $50k mortgage debt? As for the call-option nature of loans, that only applies in a few states (admittedly including CA and TX), and only to some loans (mostly only the first loan). While you are probably right that some mortgages should be excluded for this reason, I'd be surprised if they were the majority.
- jhamburger 16y agoThe reason mortgage debt is better is because the asset borrowed tends to appreciate (although obviously not in the past 5 years) whereas with a car loan or credit card the asset(s) depreciate quite rapidly, on top of the fact that the interest is much higher and not tax deductible.
- locopati 16y agoA mortgage is also potential equity whereas your credit card debt is not. I'm going to pay to live somewhere (rent or mortgage). If I have mortgage debt, that 'rent' payment is becoming ownership. In addition, the interest on that debt is deductible so, to some degree, it comes out in the wash (so to speak).
- nhangen 16y agoThis says consumer debt, which I assume excludes mortgages, right?
- jhamburger 16y agoMore than a little. And I didn't think consumer debt included debt used for investments like a mortgage, so it seems like this is just a case of wolfram alpha not interpreting a query correctly.
- mtw 16y agoby definition, mortgage is still a debt
- chailatte 16y agoPretty sure we can keep spending money on Zynga/iphone games just a little bit longer....before we can't afford food/gas.
- bugsy 16y agoThat's not the consumer debt figure. Consumer debt, which is credit cards and other unsecured, mostly high interest debt, is $2399 billion. http://www.federalreserve.gov/releases/g19/current/default.htm http://www.federalreserve.gov/releases/g19/current/default.h... That comes to $2399 billion / 307 million people = $7814 per person.
- kevin_morrill 16y agoSounds a bit more accurate, but pretty much just as scary. If you add in your share of the national debt, it gets really scary. Politicians likely won't have the backbone to deal with making cuts/raising taxes so the likely outcome is sustained inflation.
- MoreMoschops 16y agoOn the plus side, the majority of the national debt is owed to people and bodies within the country; in essence, the government representing the people has borrowed from those people on behalf of those people.
- TomOfTTB 16y agoJust to give the full number the average Californian owes $132,655 with National Debt, State Debt and Consumer Debt (including mortgage, car, etc...) U.S. Debt: http://www.usdebtclock.org/index.html http://www.usdebtclock.org/index.html California Debt:http://www.usdebtclock.org/state-debt-clocks/state-of-california-debt-clock.html http://www.usdebtclock.org/state-debt-clocks/state-of-califo... Consumer Debt: http://www.youngmoney.com/get_out_of_debt/california-leads-nation-in-consumer-debt/ http://www.youngmoney.com/get_out_of_debt/california-leads-n... (Though that doesn't include the estimated $1,012,540 per citizen in unfunded liabilities)
- rbranson 16y agoLet's not conflate "unfunded liabilities" with actual current debt load though. While both dollar figures, they are wildly different in nature.
- andrewparker 16y agoIs there an investment opportunity around this number? For example, $43,100 in consumer debt per capita seems totally unsustainable, and one way it might get corrected is through very high inflation, which would make our past debt more reasonable by comparison. So investments that perform well in inflationary periods would make sense... Other ideas?
- MaysonL 16y agoGiven that the number is incorrect, basing investment strategy on it would not be the wisest idea around.
- jaekwon 16y agoIs it even possible to bring this figure down to $0?
- KirinDave 16y agoI was a bit disappointed that when I changed the "s" to "k" (and tried variations on that theme), Wolfram didn't have the answer. I want to like WA, but I feel like its data is so sparse and often spiked just for demos like this. I'd really love to use WA to do a consumer debt comparison for the western world, but they don't ingest most other country data.
- TomOfTTB 16y agoI actually think this is an incorrectly attributed number. If you multiply $43,100 * 300 Million people (remember the population number is 2008) you get around $12.9 Trillion dollars. That's around where the National Debt Clock would have been in Q3 2010 (http://www.usdebtclock.org/ http://www.usdebtclock.org/) So this is each U.S. citizen's share of the U.S. National debt not Consumer Debt
- jonhendry 16y agoFor comparison: US GDP per capita is roughly $46,000.