The Debt We Owe to Bush

Personal debt is spiraling out of control. Snippets:

...Statistics released recently by the Federal Reserve show that consumer debt, excluding mortgages, doubled over the last decade to record levels. Consumer debt, such as credit cards and auto loans, hit a record $1.98 trillion in October, amounting to $18,700 per household. Experts say the figure will rise again after holiday-shopping statistics are taken into account. The number of past-due credit accounts rose to a high of 4.09 percent from July through September, according to figures released last week by the American Bankers Association. "The job market has been flying against strong headwinds, lengthening the time between jobs and intensifying financial stress," said James Chessen, chief economist for the trade group. Without strong job growth, the trend will continue, Chessen said, leading to greater debt and additional personal bankruptcies that will wound the recovery or further split consumers into blocks of winners and losers.... ...Many consumers are feeling trapped in a web of debt, said Tamara Draut, a spokeswoman for Demos, a nonpartisan public-policy organization... The recent tax cuts didn't help the people who needed them the most, Draut said. "The jobs aren't coming back yet, so many families are dealing with the fundamental issue that their wages aren't keeping up with their costs." ... ..."The good news is that consumers continue to do their share to expand the economy," said Samuel J. Gerdano, executive director of the American Bankruptcy Institute. "The bad news is they continue to add to their debt burden." Last year, the number of business bankruptcies declined. But the number of personal bankruptcies during the 12 months ended Sept. 30 rose to 1.66 million, up 7.4 percent from the 1.54 million filings in fiscal year 2002 and a record total of filings for any reporting period ever. Gerdano said bankruptcies might be considered "a natural outgrowth" of a vigorous $10 trillion economy driven almost exclusively by consumers. Such high levels of personal bankruptcy and consumer debt don't spook policymakers necessarily, he said, because spending on credit is a powerful arrow in the economic quiver. "The economy is doing well because people are going into debt, and it is a matter of fact that as the economy improves, more people will grow deeper into debt and bankruptcies will grow," he said. The need is striking a happy medium. Roger M. Whelan, a former bankruptcy judge for the District of Columbia, said the challenge is improving the economy without overspending. "It's a conundrum: Credit fuels the improvement, but overspending can result in debt and losses to the (credit) industry," said Whelan, a scholar in residence at the American Bankruptcy Institute. "We are living in a society where living within our means is not the thing to do. Keeping up with the Joneses has a greater meaning today than it's ever had." Whelan and other experts note a lack of education courses on proper budgeting. They point to the large number of college graduates who leave school with huge debt.

"Happy medium"?? Who are they trying to kid? When interest rates start climbing after the election, personal bankrupcies will consequently most likely go through the roof, the real estate market will crash, real unemployment and inflation will rise dramatically, and the economic conditions of the past three years, as bad as Bush has made them, will seem like nirvana in comparison.