Why I Chose These Indicators I chose these indicators because all are something that ordinary people deal with every day. All of us have control over our own spending and how far into debt we go. If we are not making the salary we want then we are free to look for a new job or an additional job. There is also the possibility of going back to school to raise your educational level in order to get a better job. This may, of course, put us deeper into debt. We are in debt as a country, and as individuals, but with the economy as strong as it is people have no qualms about going deeper into debt. There are increases in delinquency rates on consumer loans, record numbers of bankruptcy filings, and an increasing share of income devoted to paying interest on debt. These are signs that some households are becoming overextended. In this paper I discuss bankruptcy, consumer credit, inherited wealth and the difference in the way some generations handle debt. Executive Summary Personal income, installment debt and unemployment are coincident or lagging economic indicators or both. By many measures the US economy is very healthy, but increasing consumer debt and personal bankruptcies raise concerns about the future. Credit card debt is higher than ever, and personal bankruptcies soared in 1995 and 1996 (Silverman 1997). Over 10% of Americans are expected to declare bankruptcy during the 1990s unless the trend changes, and there is no longer public scorn for those who file bankruptcy (Darlin 1997).Consumer credit remains readily available despite rising bankruptcies. This trend is attributed to a credit-friendly social policy which requires credit to be extended without discrimination. Furthermore, easy credit is needed to allow consumers to buy goods. The lending business also remains lucrative. To manage risks, financial institutions resort to diversification and risk shifting. The cost of bankruptcy is also incorporated in the cost of credit (...
