Bankruptcies, Report Conclude Basics, Not Luxuries, Are Causing High Debt

Bankruptcies, Report Conclude Basics, Not Luxuries, Are Causing High Debt
May 19, 2006
The debate continues!

The debt of an American family earning $45,000 a year rose 33.1% from 2001 to 2004, after adjusting for inflation, according to a study by the Center for American Progress, a Washington think tank run by former Clinton White House chief of staff John D. Podesta, which was based on raw data compiled from the Federal Reserve Board's Survey of Consumer Finances.

Further the study concluded that increased debt is NOT due to using credit cards for "luxury" items but to compensate for the rising costs of health care, housing and education.

The study concluded that real wages, after adjusting for inflation, have been flat since 2001, while the costs of medical care, housing, food, cars and household operations rose 11.2%. Most notably, education debt rose 127 % between 1992 and 2004, from $3,427 to $7,800, and health-care costs rose due to insurance costs increasing and more employers shifting expense to workers.

http://www.clla.org/washington_hot_news.cfm?news_id=549

That article really hit the nail on the head!!

Bankruptcies, Report Conclude Basics, Not Luxuries, Are Causing High Debt
May 19, 2006
The debate continues!

The debt of an American family earning $45,000 a year rose 33.1% from 2001 to 2004, after adjusting for inflation, according to a study by the Center for American Progress, a Washington think tank run by former Clinton White House chief of staff John D. Podesta, which was based on raw data compiled from the Federal Reserve Board's Survey of Consumer Finances.

Further the study concluded that increased debt is NOT due to using credit cards for "luxury" items but to compensate for the rising costs of health care, housing and education.

The study concluded that real wages, after adjusting for inflation, have been flat since 2001, while the costs of medical care, housing, food, cars and household operations rose 11.2%. Most notably, education debt rose 127 % between 1992 and 2004, from $3,427 to $7,800, and health-care costs rose due to insurance costs increasing and more employers shifting expense to workers.

http://www.clla.org/washington_hot_news.cfm?news_id=549

Yeah, where I work, my deductions to pay for my health care went up $130/month starting June 1, and my out of pocket expenses when I go see a doctor just went up.