But installment debt and stock market margin debt carried by consumers are now an astounding 24.5 percent of disposable personal income. From 1965 to 1995, this figure averaged 18.4 percent. It is off the charts thanks to margin debt, which now accounts for more than 3.5 percent of disposable income, up from an average of 0.78 percent for the 30 years ended in 1995. This debt load also means that consumer spending could contract significantly, exacerbating the downturn. If I don't need new shoes, I don't buy them.
Most people do.
We drive old cars. But we have not gone out and built the new house yet. Bankers are trying to loan us the money. They tell us we are nuts, build it now. But we want to wait until the loan for the lot is paid off.