American debt greater than disposable income

American debt is greater than disposable income. It seems that the reason debt across the U.S. has fallen in the last few months is not that consumers are spending less money, but rather that they are defaulting on what they owe.

Debt across the U.S., including everything from mortgages to credit card debt, was at 122 percent of the annual disposable income at the end of March, according to a new report in the Wall Street Journal. While that number is better than it was before (it reached 131 percent in the first quarter of 2008), economists would like to see that number closer to a more reasonable level, around 100 percent.

Since that peak in 2008, lenders have written off roughly $210 billion in mortgage and consumer loans as uncollectible, the Journal said. Meanwhile, investors lost at least the same amount, but more likely well over it, on loans banks sold as securities, meaning the total loss was over $400 billion. But, the paper said, the decrease in household debts over the same time was only $372 billion.

An ABC News report said that it was unlikely the new credit card laws would help consumers out of their debt.