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Debtors Repent By Walking Away, Not By Paying Off

We’ve all heard it said that Americans are good at spending, but lousy at saving. Well, it now seems that Americans are good at running up debt, but lousy at repaying their debt. This isn’t exactly a ringing endorsement of the character of the U.S. consumer…

“Appearances are deceptive,” said Harm Bandholz, an economist at Unicredit Markets, who said that top officials at the White House and Federal Reserve have not entirely owned up to the ugly truth.

By Unicredit’s analysis, “the entire decline in household debt is attributable to a massive surge in loan defaults” and the resulting debt write-downs by banks, he said. “There is no deleveraging going on.”

http://www.washingto…-by-paying-off/

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