Bracing for a recession

Time has an article in their new issue about our likelihood for a recession in the near future.

Bracing for a recession.

I haven’t noticed a drop off in activity at the stores lately, but I do get the impression that everyone is a little desperate this year to get just the right toy.

From the article:

This activity has been increasingly fueled by debt. In 1983 household debt equaled 55% of income in the U.S.; now it’s above 114% (and above 136% of after-tax disposable income). The middle class–households earning roughly between $20,000 and $100,000 annually–had a debt-to-income ratio of 141% in 2004, according to New York University (NYU) economist Edward Wolff. And he figures it’s even higher today.

Consumer spending makes up 70% of the economy.  It doesn’t take a very small decrease at the spigot for it to trickle down and cause some serious problems in our economy.

Advertisements

One response to “Bracing for a recession

  1. Wow. No wonder the economy is teetering. Unsustainable in more ways than one…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s