Read Household Debt article. Post a 2 sentence comment that summarized the article and gives your opinion of the problem.
Try to balance the federal budget by playing the budget game.
Check stock portfolio. Find the stock that has been your best or worst. Scour the headlines and explain the following:
1. What company made you the most money? (% and $ amount)
2. Based on research of headlines explain why your stock has performed the way it has.
- cite the source / sources you used to come up with your reasoning
I think the main reason of the debt is because too many house holds are too deep in credit card debt. If they were to be free of credit card debt then the house hold debt would be much better off.
ReplyDeleteThe debt in housing was always very bad when it failed. and now its the worst it has ever been, and its effecting everyone.
DeleteThe economy was hit hard because of the household dept rising from $7 trillion to $14 trillion. The biggest problem is that both average people and the government spend more money than they really have and so debt ends up being very hard to recover against because it hurts the whole economy.
ReplyDeletethey are looking for strategies to boost the economy. i believe that if they keep a low rate more people could afford homes.
ReplyDeletethe problem in this article was that the economy will be stuck in an equilibrium where household demand for goods and services is depressed by a real interest rate that isn't low.The reason for that would be the financial institutions that would most likely lose from any mandatory principal reduction or debt are more politcally powerful than in the past.
ReplyDeleteAfter reading the article, I believe the problem is that people are spending money they don't have and don't ever plan on paying back. Also, in my opinion the banks should not give out loans to people they don't think will pay them back without looking into their background with money and how much they are going to make in the future.
ReplyDeleteAfter reading this article it is obvious the problem is that people get loans from the bank when they clearly didn't think about and don't know if they will be able to pay it back and now they can not afford the houses they buy. The household balance sheet is in the worst condition than any other point in history since the Great Depression. Mortgage defaults and foreclosure reached levels that were unprecedented in the past 30 years. In my opinion the bank needs to look more into who they are loaning money too and what their financial status is.
ReplyDeleteI think people become in debt is because when people buy houses, they don't realize how much money they're going to put into the house with the interest rate. People are spending money that they don't have, and can't afford to pay the interest back.
ReplyDeleteI think households with a lot of debt would benefit more if the government stepped in and helped. If they are in debt, and they got help before they default on mortgage or their homes are foreclosed, this could prevent them from losing even more money.
ReplyDeletePeople are in debt because they spend their money on things they don't need. They also get loans and they can't afford to afford to pay it back. People also have credit cards and they spend money they dont have and dont pay it back.
ReplyDeleteOne of the main ideas of the article is that the people with a lot of debt have trouble paying back the government and as a result they did not pay at all. I think that eventually the USA is going to have to find an alternate source of money, for example create a new kind of money and have two sources of money. The idea is extreme but at this rate there is no other way.
ReplyDeleteI think that a major reason for bankruptcies in the U.S. is because of health issues.
ReplyDeleteAnother big factor may include job loss. A family may have bought a house based on two incomes, and if they lose one income, they might not be able to keep up on their expenses.
Other reasons people fall in to debt may be shopping in order to help themselves feel better. Other people may not take the time to calculate their earnings and expenses, and wind up charging more than they can afford.
Individuals need to realize their spending limits in order to benefit the nations economy as a whole. Going to the bank and receiving loans that you cannot later afford is irresponsible and though the bank is at fault as well for giving the loans it is the ignorance of people that is causing the problem to fester.
ReplyDeleteAfter reading the article i think the problem is that people take loans from the bank and never pay them back. They get stuck in debt and cant seem to get out of it. I think banks should be more strict on who they give loans to. They should check credit scores or make a standard where to get a loan you need a certain credit score. People do not take into consideration their budget. They spend their money on things they do not need, for example cars and houses. then they are unable to pay for it.
ReplyDeleteI think the major reason why the U.S is in such a pickle is because many jobs are being lost. People who have worked so hard for so much in there life lives they are slowly losing all that they work for. Also many people are spending some of there money on things they don't always need. They might want it at the time but later down they might regret it later on. Lastly the household balance is the worst since the Great Depression. People need to change there spending.
ReplyDeleteThe major problem is that people are spending money that they don't have.The problems with loans and mortgages are that they are long term investments, so you don't know how you will be faring financially in the future. People take out money that they don't have and that they may not ever have.
ReplyDeleteI think a major result of this debt is that people are spending money they don't have. Also the banks are giving loans out that wont be paid and its resulting to even more debt.
ReplyDeletePeople need to only borrow money they know they can pay back, and have a plan for paying it back before they even borrow it. They need to think about the loans they are getting and the banks do too; they can't give out money freely and expect to get it all back. People need to stay inside their budgets.
ReplyDeleteThis article explains that there are two sides to why we are in debt. One side being that the gov't intervening is not good for our recovery. And the other side being that the public and communities need to spend more. But in reality nobody has a lot of extra money to spend on different things.
ReplyDeleteI think that the problem is that people are getting greedy with they're money, and they're thinking that they can afford things that they really can't. Also the banks seem to be just lending out money to anyone who asks for it. Banks need to be more strict with their money, and fully investigate the background of the people they're thinking about giving their money to, so they know they won't ge screwed over.
ReplyDeleteI think one of the main reasons the debt has fell so deep is because people spend more money then they can pay back. People always constantly keep buying things that they want or don't need and keep putting off to actually pay back the money that they didn't have in the first place.
ReplyDeleteOne of the biggest causes of debt among the average household is the fact that people are spending money that they don't have: taking out loans on houses and financing new cars and technology and being unable to keep up with the interest rates and monthly payments. There are other reasons, including people's medical issues, unemployment rates, buying necessities (food, clothes) on credit, education, low-paying jobs, etc. If interest rates were lower, or if people only spent what they had, the average amount of debt faced by a household would dramatically decrease.
ReplyDeleteThe reckless tendencies of both bank holders and the loan recipients are to blame for our economy, if we were to limit the loans being given out to better monitor the recievers paying back their loans we could of avoided this whole mess. The housing industry ruined our good streak of economy, the saying that they were giving a lot of rope with their loans and they hanged themselves by not paying the loans back and the domino effect began of our 2007 recession.
ReplyDeleteAfter reading this article, i think that individuals were expected to save. If they wanted to make a major purchase, they saved enough for the down payment. Twenty percent was required for a house. Likewise, savings were necessary to purchase a car. I believe the Fed's actions since that time have destroyed that culture. Rampant inflation of the 1970s led people to believe saving is the path of economic ignorance.
ReplyDeleteThe loss of jobs and lack of motivation people have to get jobs is a major reason for loss of money in the U.S. People fall into debt when prices for necessities increase. The U.S. money supply is not in positive circulation due to this. The demand for goods and personal spending is lacking because people can no longer afford to spend money on the little things. U.S. citizens result to receiving loans and majority of the time they can not pay them back.
ReplyDeleteI found it interesting how differently the recession affected those in different areas of the country. In some places with the highest household debt the recession lasted up to four years where in other communities with less debt the recession lasted less then a year. Some people were able to handle their money appropriately while others got in over their head causing them to suffer greatly in the recession. Obviously some people had the right idea and if everybody could understand their model of living maybe the country would be better off.
ReplyDeleteAfter reading "Household Debt Is at Heart of Weak U.S. Economy: Business Class", I think the problem is that since there are so many job layoffs people can no longer afford the price of living. This also includes paying their mortgage. Families are forced to foreclose on their house due to the high rates that they can no longer afford to pay. Solving the household debt problem won't be easy. But recognition is the first step toward a solution. If policy makers would acknowledge the drag on the economy from excessive household debt, a fix may present itself. In my opinion, the economy must fully recover in order for families to start buying full mortgages again, until then families will continue to foreclose houses and live in apartments and hotels
ReplyDeleteI believe that the reason people are in debt is simply because they spend money on things they do not need, such as big expensive houses or cars. People should only borrow money if they definatley know they can pay the money back. The problem is that people think they have money when they really dont, and may never have.
ReplyDeleteOne of the biggest factors for household debt in America would be loans taken from the bank. With currency changing ever so frequently many families are taking out more than they can pay off throughout the years. Not to mention this issue gets contributed with other costs such as health care bills and socio-economic activities. Unless you're on very well balanced budget, the interest on majority of these costs are a lot to handle.
ReplyDeleteThe cost of houses dramatically increased at one point in the past few years and because of it we are left with massive debt due to inflation and devaluing of the US dollar. Home owners and realtors may have more money, but because of the inflation it is now worth less; prices of many different goods have increased. It is my understanding that if we lowered our taxes on most products and services, these companies will bring the money back home instead of being inside off shore bank accounts.
ReplyDeleteI think the major problem after reading this article is the fact that people don't think ahead if they will be able to pay off their debt in the long run and don't take into consideration the things they can actually afford. If banks would pay closer attention to the finical status of people they loan money to our country would be better off.
ReplyDeleteMy best stock is Amazon, it has gone up 6.8% since i bought it. After reading articles I have found out that Amazon stock went up due to people giving the website a higher rating. The stock market price has raised 47% over the last year. This company is an online website that sells to everyone at cheap prices. They sell things from books to phone cases and jewelry. Amazon is a good website to go to if you want to get good quality items for cheaper prices.
ReplyDeleteThe household debt increased from $7 trillion to $14 trillion dollars. People are spending money that they do not have and that is why this number is still on the rise. If people do not stop using credit cards and loans to pay for things, this debt will never be under control.
ReplyDeleteAfter the reading the article It seems that some people who need the money will over spend for the things that they both want and need despite being in a recession. If some are able to hold on for awhile they would be able to save their houses.
ReplyDeleteThe reason people are i such debt is because they spend more money then they can afford.
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