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Article: Debt and "the" consumer.
- Article from:
- Business Economics
- Article date:
- April 1, 1997
- Author:
CopyrightCOPYRIGHT 1997 The National Association for Business Economists. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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The often-repeated statement that the U.S. consumer is overburdened with debt conveys the notion that the average household's financial condition differs only in degree from that of those well-publicized few who are unable to meet their debt service obligations. We contend that such a generalization is unwarranted and leads to the erroneous conclusion that rising ratios of consumer debt to income provide a leading indicator of weakness in consumer spending.
WHEN DOES DEBT BECOME AN OVERBURDEN?
It is useful at the outset to define an overburden of debt. Because the concept is frequently associated with pessimistic forecasts of consumer spending, we view it as a ...