(I took that phase instead of the editorial title because it is an evaluation of so much of America. A thread bare economy, polity, environment, social structure, everything from human relations to physical infrastructure, seems just one jolt from falling apart.0
http://select.nytimes.com/2005/11/27/business/27gret.htmlAfter the Debt Feast Comes the Heartburn
By GRETCHEN MORGENSON
Published: November 27, 2005
DOES a financial train wreck lie dead ahead for American consumers and investors? Paul Kasriel, chief economist at the Northern Trust Company in Chicago fears as much. He reckons that even a mild recession next year could spiral into something ugly, given the combination of rising interest rates, off-the-charts consumer debt and a cooling housing market.
"We have a very accident-prone economy," Mr. Kasriel said. "We have the most highly leveraged economy in the postwar period, and the Fed is increasing rates. In the past 30 years or so, whenever the Fed has raised interest rates, we've quite frequently had financial accidents."
snip
Here's a stunning figure: In the third quarter of 2005, Mr. Kasriel calculates, households spent a record $531 billion more than their after-tax earnings, on an annualized basis.
These nonstop shoppers have propelled consumer spending to a record high as a share of gross domestic product - 76 percent in the third quarter, Mr. Kasriel said, up from 73 percent in 2000.
snip