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Household Debt

May 21, 2011

I have been thinking a lot about the lifestyle of the average american, and how how expensive it is. While many are able to afford their house, car, cable, phone, cell phone, internet, etc payments that means that debt is kept elsewhere. This is exemplified by the amount of mortgage and college debt the average person has. Look at this chart:

Compare that to this:

Consumption is rampant in our society. Its easy to see here that we are living outside our means, and as much as we want to point fingers at banks and insurance companies – we cant forget that it was us that is after all this new crap.

We dont work less, or have more free time than we used to, despite all the increases in technology. Everyone is obsessed with things like Facebook and twitter, but those add no real value to our lives. They are simply conduits to further our consumption. Think about it, Facebook is free. Its a $50bn company, but consumers pay nothing. It makes all of its money from advertising (same with twitter, google, etc)

I am rather confident this will all come to fruition one day. I hope its sooner rather than later, as the longer this debt cycle continues the more painful its end will be. I suspect that inflation, taxes, and lower earnings will put a serious cramp on egregious consumption. Hopefully people will have saved enough to buy food. Ill leave you with this:

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