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6.2 Buying Now, Paying Later

6.2 Buying Now, Paying Later
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  • Math Help

    In Example 6, it should be noted that the graph showing total consumer credit in the United States excludes home mortgages. (See Exercise 18.)

    In the solution to Example 6, the average indebtedness per household in 1952 was

    or about $700. The average indebtedness per household in 2008 was

    or about $21,900. So, the average indebtedness per household increased by a factor of

    During the same time, the CPI increased by a factor of

  • Consumer Suggestion

    In addition to being a published author, Lendol Calder is also a college professor at Augustana College. To see what former students think of his class, or any upcoming classes that you are considering taking at your college, check out ratemyprofessors.com.

  • Checkpoint Solution

    Sample Answer:

    Lendol Calder may be right that the "now and then" comparison is not as straightforward as it seems, but I think that consumer debt is indeed a national problem. People not being able to pay their mortgage debt contributed to the subprime mortgage crisis of the 2000s, which had a hand in causing the 2008 recession. Consumers need to spend money for the economy to pick up, but for the millions who are in debt, spending more money would be personally irresponsible.

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    Ron Larson (author)6 years ago |
    I love the American Dream. It was a big part of my youth. At my web site, I wrote an essay of how the American Dream influenced my life and my career. See http://www.ronlarson.com/essay.html.
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