The latest data on savings as a percentage of personal disposable income in the U.S. makes you wonder how American consumers are going to be able to take on and service debt in the face of potential economic stagnation as new world economies come online.

 

As of December 2006, household debt rose to 132.4% of disposable income. Families spent 14.5% of their income just to service the payments on their debt in recent quarters.

 

With savings running into negative numbers you just have to ask how long and how fast can the American consumer continue to pedal when they are clearly becoming maxed out on debt.

 

It seems obvious that if lenders want to be able to continue to extend creditor to American families that they are going to have to extend the repayment terms available in order to lower monthly payments to within serviceable levels. Of course the only problem with this approach is that once a family is fully burdened with debt it will take an entire generation to break free or eliminate it.