Credit counseling services report typical consumer debt is over $20,000 and not including their mortgage. The Federal Reserve places American consumer debt at 2.6 trillion in Non-mortgage debt. That places a price tag over $8400 on every child, man and woman.

Statistics also show that only 39% of Americans say they have a budget to track monthly household spending. Also those that have a balance on their credit cards that the average was $7300 and that the median credit limit rose by 21.4 % to $18.000.

Us Americans are a sad group of people, who have become consumed with out of control spending patterns, irresponsible financial habits and that these have effected the entire world. The governments new slogan or saying is, “the era of responsibility”. This is one area in which Americans fall short by allot of measures. In my opinion, the jury is still out on the slogan for only time will tell if this is a true statement for both government and individuals.

Take spending for example. In economics there is a law of supply and demand. This law states that supply and demand are inversely proportional to each other. So, when supply goes up, demand comes down. When the US contracted on spending, it affected the world economy because parts for items which we buy are manufactured all over the globe.

Banks and other financial institutions took advantage of American people, who are in general financially irresponsible. They’re impatient and want things now and are willing to pay for that luxury. Credit card companies knew these weaknesses, gave them credit cards with escalating limits of credit to consumers who couldn’t control their spending habits, which is nothing short of a disaster waiting to happen. When the crisis did happen, it took the entire world’s economy with it. As stated before, products purchased are manufactured all over the world. When the US economy contracts, it effect every country involved in the manufacturing chain.

The basic American is also affected because now they have to pay off their debt on top of every other bill. This is how the banks accomplished their objectives of having a constant flow of monthly income by giving high credit limits, knowing the American peoples weaknesses and making it so Americans cannot pay down their debt. Thus we become slaves to the bank.

If paying down debt is appealing to you along with information on “consumer debt” then a subscribe to Greg Steele’s newsletter about methods of reducing consumer debt. As a bounus, I will send you the Federal Reserve Report called “Survey of Consumer Finance” which is a report that looks into the financial condition of American families.