Thirty-seven years later, in 2007, with an estimated population of 301 million people, consumer debt broke $2.5 trillion and revolving debt was more than $942 billion.
Lets look at per capita consumer debt. In 1970, total consumer debt worked out to around $650 per capita. In 2007 consumer debt hit a whopping $8,365 for every man, woman and child in America.
Whats so bad about consumer debt is that its money borrowed for consumption and not backed with an asset like a house. Its just borrowing money to purchase things like food, clothes and going out bowling (seriously, when did bowling get so expensive).
But if you arent scared yet, just look at the numbers for revolving debt. Revolving debt is the debt that doesnt get paid off, but carries over from month to month and year to year. From 1970 to 2007, revolving debt increased by 18,740 percent. Thats right, eighteen thousand seven hundred and forty percent. Per capita revolving debt was $25 in 1970. In 2007, it reached $3,130.
Why is this happening?
These numbers certainly pose more questions than they answer.
Is consumer debt increasing because Americans make less money now than they did in 1970 and theyre using credit cards to buy food and clothes?
Or is it because Americans now live beyond their means and rely on credit to do so?
And in terms of the credit card companies, are they filling a need or creating debt junkies out of a nation of consumers?
Ill be exploring these questions and more with my continuing series on consumer debt and usury.
For census data, I used the U.S. Census Bureau Fact Finder.
Federal Reserve stats on consumer debt.
Here are the numbers I pulled together to base my calculations on for this story.