Here, courtesy of Amanda Terkel at Huffington Post, is a bit of political theater worth noting: Rep. Hansen Clarke cutting up credit cards on the floor of the House. He is making a political point: there is a connection between personal debt and government debt. Part of the reason the national debt is so troubling is that U.S. household debt is out of control also. It’s the total amount of debt, in comparison to the total economy, that determines the degree to which debt drags on the economy. Everyone who has any debt can participate in reducing it. “Stop . . . buying things you don’t need with money you don’t have,” Clarke says, moments before taking out the scissors to cut up one credit card after another in a Cookie Monster-like scene.
U.S. household debt has, at least, stopped its relentless upward march of the previous half century. If it is not yet declining convincingly, I believe that is just a matter of lag, the time it takes for people to adapt to new ways of living and form new habits. But it’s easy to see that attitudes have changed, and that credit cards, loan payments, and leases don’t have the cachet that they had in the past. The United States collectively is a long way from the financial strength that will balance out all the things we want to buy, but the desire is there, and that’s how it starts.