Newspaper Article

TO START WITH...; DEBTS ON THE RISE - WHAT, ME WORRY?

Marshall Robinson, an economist, is a visiting professor at the City University of New York and the former president of the Russell Sage, Foundation., MARSHALL ROBINSON

1988

Overview

About $1 trillion of that total was for consumer debt - money spent on cars, college tuition, vacations, braces for the kids' teeth. In recent decades consumer debt has waxed and waned with the state of the economy, running at about 17 percent of the Gross National Product in slow years, climbing to 20 percent in good years. In our current five-year upswing, it has gone higher, peaking in 1986 at a record 23 percent of G.N.P. Since then it seems to have stabilized at around 22 percent, reflecting consumers' somewhat more cautious optimism about the economy. Americans have shown that they are prudent about borrowing, not only for consumer goods but also in their pursuit of the great dream, a house of their own. Thirty years ago home mortgage debt stood at $113 billion, equal to about 25 percent of G.N.P. Today it amounts to $1.8 trillion, equal to 41 percent of G.N.P. * FEDERAL DEBT. Ten years ago the Federal Government's debt to the public was about $600 billion; today it has soared to almost $2 trillion. But the national debt today is equal to only about 43 percent of G.N.P. - which is the same as it was in 1933 and smaller than it was at the end of World War II, when the debt was equal to 110 percent of G.N.P. After that the economy grew and the debt gradually fell in relation to our national income, reaching a low point of 24 percent of G.N.P. in 1974 - its lowest point since 1929. Today's national debt is no more scary than it has been at any other time in the past 50 years.

• Publisher: New York Times Company
• Subject: CREDIT / FINANCES / NATIONAL DEBT (US) / ROBINSON, MARSHALL (PROF)