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Comment by metadat | Hacker News Reader

16.9T of c̶c̶ household debt is around $80,000 per American adult. Not the best.

Even still, a lot of alarmist phrasing in this piece:

> During the fourth quarter of last year, mortgage originations dropped to 2019 levels

Wasn't real estate doing fairly well before the pandemic?

> While total delinquency levels remain below what was seen pre-pandemic - 2.5% of outstanding debt was in some stage of delinquency as of December versus 4.7% at the end of 2019

What's the underlying agenda here? None of this appears deeply concerning to me.

Edit: @eyphka I estimated there are approximately 300m Americans, so that's what I divided by. Turns out there are actually only 200m American adults, though, so the figure is probably more like $7-8k/American taxpayer.

Edit #2: I was off by a factor of 10! 16.9T/200m = $80,000. Sorry.

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Uh. Did you miss a decimal point? 16.9 trillion divided by 200 million is $84,500. That's a huge difference.

Agreed. My bad.

You've dropped a zero somewhere. Your calculation assumes 3 billion americans.

There's 100 million American households. $16.9e12/100e6 = $169,000.

Thanks for the correction.

> What's the agenda?

Selling clicks. A decent number of Americans view debt as immoral, and will consume content implicitly rewarding financial piety.

There's nothing moral about it: debit is helpful if it helps you make more money. If you have no way to pay it, debit is really a terrible problem.

I think many Americans see consumer debt as a sign that households aren’t building wealth. It really depends on the type of debt and how it’s distributed amongst consumers.

Math's off should be a little more than that.

Average U.S. household owes something close to six figures in debt ~ 7% growth in one year

That figure includes mortgage debt, GP said CC debt.

I was mistaken, the $16.5T figure is for all debt.

7% is less than inflation so the real debt actually decreased

Sadly that's not how it works for the average household. Unless average household earnings go up, inflation hurts as many household debts are variable rates.

In my opinion that average household is still a winner in long term as eventually rates will drop, average earnings will go up and the loan will already be devalued.

Something doesn’t add up unless there’s over 30 ppl in average households.

Is one number revolving debt and the other all debt? Including mortgages the 165k sounds reasonable

Except that debt is not evenly distributed. Lots of people have zero CC debt, and many others have several tens of thousand dollars in debt. As interest rates climb it is expected that delinquencies will increase.

> 16.9T of cc debt is around $5,600 per American.

Total debt, not CC debt. The vast majority is mortgage debt, so "secured". According to TFA the uptick is due to increasing CC debt.

I mean that sounds like a lot of debt to me when the median income is like $54k a year [1].

[1] https://www.firstrepublic.com/insights-education/how-much-do....

Does it make sense to compare mean debt to median income?

But this debt is mostly mortgages and most people making the median income don’t have one.

Isn’t it total household debt, not exclusively credit card debt? Credit card debt is only $986B.

$80k per American isn’t that crazy when you look at a mortgage or car note.

Would an average even mean much, as opposed to debt to income ratio? Lower incomes will presumably have a higher debt to income ratio.

Edit your edit, there’s 331.9 million Americans as of (2021)

Only 200m Americans over the age of 18. Children generally don't have debt.

It’s about $50k.

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