Re: Better in the red than dead

[Jim Devine <jdevine@xxxxxxxxxxxxxxx>]

At 10:19 AM 08/31/2001 +0300, you wrote:
> Personal debt hits record high
>
> Low interest rates see borrowing soar to £700bn
>
> Heather Stewart and Charlotte Denny
> Friday August 31, 2001
> The Guardian
>
> British households have ignored rising concerns about the health of the
> economy and taken advantage of low interest rates to
> stack up a record £700bn in debt, it emerged yesterday.
>
> Despite the deteriorating international outlook and a warning earlier
> this month from the Bank of England that borrowers could find
> themselves in trouble if the economy slows sharply, the average British
> household owes more than £5,300, on top of their
> mortgage.
>
> City analysts said consumers appeared oblivious to the global downturn.
> "If the economy is slowing it seems that no one
> bothered to tell the consumer," said Jeremy Hawkins, chief UK economist
> at Bank of America.
>
> With borrowing rates at their lowest since the early 1960s, households
> are taking a relaxed view about their debt burden.

this contrasts with the US [still the spider at the center of the
world-wide economic web], in which consumer spending recently rose much
less than did personal income. After a period of what might have been
"necessitous borrowing" (to use Bob Pollin's phrase), it might be that US
consumers are moving toward actually saving, encouraging a deepening recession.

Jim Devine jdevine@xxxxxxx & http://bellarmine.lmu.edu/~JDevine