Sep 20, 2007 -- Private debt is much higher now than during the Great Depression, and has been allowed to grow as if there were no consequences to borrowing, and no limit to what can be paid back in the future.
Rising Debt to Income Ratios
| Year | Debt to Income Ratio |
|---|---|
| 1952 | 40% |
| 2006 | 126% |
Source: Center for American Progress (CAP) Report
America is frequently called the 'richest nation on earth', but the reality is that the American people are living on borrowed money.
There is not one sector in the U.S. that has shown any measure of refrain. Government, corporate, and consumer debt are all at record levels. Private debt, which is debt from a private entity, such as a bank, has skyrocketed in the last three decades alone.
Our country is more leveraged by private debt than ever before. Families have the lowest rate of saving since 1929 and historic debt ratios according to the Family Income Report.
A Coming Depression
The staggering amount of private debt in the U.S. is frightening. The same debt problems that led to the Great Depression are currently present within our system:
...
The problem with private debt has not gone unseen by our nation's leaders. Many years ago, Thomas Jefferson issued a dire warning about banks and debt:
'If the American people ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless. I sincerely believe the banking institutions (having the issuing power of money) are more dangerous to liberty than standing armies. My zeal against these institutions was so warm and open at the establishment of the Bank of the United States (Hamilton's foreign system), that I was derided as a maniac by the tribe of bank mongers who were seeking to filch from the public.' ...
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