Brett Arends reminds us in this report at Marketwatch that, contrary to what President Obama noted in a press conference yesterday, we are kind of a nation of deadbeats since, collectively, we’ve defaulted on more than a half trillion dollars in debt since the housing bubble went bust.
Far from paying our bills, the current generation of Americans — or some of them — have set records for default which probably have no parallel in the history of the human race. During the last five years, U.S. individuals have walked away from a staggering $585 billion in mortgages, credit card debts and other personal loans. That works out at about $6,000 per household.
And if the numbers are to be believed, there is probably a lot more to come.
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The total debt reduction from the peak, says the Fed, is $954 billion. Loan write-offs, at $585 billion, account for 60% of that. In other words, for all the chest-thumping about how Americans are repairing their balance sheets and how we aren’t a nation of deadbeats, in the last five years Americans have walked away from $3 in debt for every $2 they’ve paid off.In the first quarter of 2010 alone about 13% of all credit card debt was just written off.
And don’t forget about the $1+ trillion in student loan debt with the sharply rising default rate.
In this CNN/Money story we learn that, in the wake of the trillion dollar coin idea being nixed, the question of selling the nation’s gold stock as a way of avoiding the debt ceiling is being raised. Here too we get a rather remarkable piece of data regarding the size and nature of the U.S. debt problem.
But experts say getting rid of the Treasury’s gold won’t work for many reasons.
The first is that though the sale would generate upwards of $400 billion, it would barely make a dent in paying the nation’s bills. The government currently borrows about $100 billion each month, meaning that the sale would only cover the U.S.’ debt obligations for about four months.
While I’m sure the Chinese would be more than happy to buy most or all of this gold, it’s not likely that the folks in Washington will part with any of it since we love our “tradition”. At least, that’s the reason why Fed Chief Ben Bernanke says we keep all our gold bars hanging around, collecting dust.