Household Debt Ratios Are Lowest Since 1990s - Seeking Alpha

Maybe some hope for America. And yes, Congress should take notice. It appears that states like Ohio, Florida, Indiana, Wisconsin and New Jersey (all led by Republican governors) are demonstrating that running government more efficiently and on a sounder fiscal footing leads to an increase in employment from the private sector.

Someone alert the bozos in DC.

Maybe in 2012, we the people can send another message.

Household Debt Ratios Are Lowest Since 1990s - Seeking Alpha:

"The chart above is an update of previous CD posts (most recent one here), showing the ongoing de-leveraging of U.S. households based on new data released yesterday by the Federal Reserve.

In the second quarter of 2011, household debt service for required payments on outstanding mortgage and consumer debt as a share of disposable personal income fell to 11.09%, the lowest ratio since the fourth quarter of 1994; and the ratio for all household financial obligations (adds automobile lease payments, rental payments on tenant-occupied property, homeowners' insurance and property tax payments to the debt service ratio) fell to 16.09%, the lowest ratio since the fourth quarter of 1993.

Let that be a lesson for Congress....."

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"Solving a debt problem with more debt has not solved the underlying problem. In the U.S., Treasury debt growth financed the U.S. consumer but has not had enough of an impact on job growth. Can the U.S. continue to depreciate the world’s base currency?" --- Goldman Sachs Report

So the Fed creates the money and cheapens the value of every other dollar in circulation.

And the money sits on banks balance sheets instead of being lent out to businesses on Main Street.

http://research.stlouisfed.org/fred2/series/BOGNONBR

Because the banks are being PAID NOT TO LEND out the money via Interest on Excess Reserves.

By definition, nonborrowed reserves are equal to total reserves minus borrowed reserves. Borrowed reserves are equal to the sum of credit extended through the Federal Reserve's regular discount window programs and credit extended through certain Federal Reserve liquidity facilities. Total borrowings from the Federal Reserve are presented in table 1a of the release. Over much of 2008, in order to maintain a level of total reserves consistent with the Federal Open Market Committee's objective for the federal funds rate, increases in borrowed reserves were offset through a nearly commensurate decrease in nonborrowed reserves, which was accomplished through a reduction in the Federal Reserve's holdings of securities and other assets. The negative level of nonborrowed reserves was an arithmetic result of the fact that borrowings from the Federal Reserve liquidity facilities were larger than total reserves.

Therefore we get these dismal economic job charts. The economy gets worse and worse, due to the law of diminishing returns of deficit, debt-based spending.

And that is why normal, blue-collar folks feel like they are on a treadmill to nowhere.

“Watch your thoughts, for they become words.
Watch your words, for they become actions.
Watch your actions, for they become habits.
Watch your habits, for they become character.
Watch your character, for it becomes your destiny.”

The American people will never knowingly adopt Socialism. But under the name of 'liberalism' they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened. -- Norman Mattoon Thomas, 6 time presidential candidate for the Socialist Party of America