Michael Chadwick, CFP, and CEO of Chadwick Financial Advisors in Unionville, Conn., told IB Times that American households are in better financial shape now than they were in 2008, during the depths of the financial crisis, but they have a long way to go before they are healthy. "People are not saving enough in America," he said. "For example, Germans save 16 percent of their income, [while] we save very little on average." But Chadwick concedes that the consumer credit card debt "bubble" does not pose as great a threat to the larger economy as it once did. "Banks are far more solid in their balance sheets than they were in 2008, so they can handle a big impact here," he noted.
That credit card debt bubble they are referring to might pop if a whole bunch of Americans were to suddenly all default on their credit card debt at once. While that's not likely to happen in the private sector, federal student loans offer forgiveness after so many years, which is why the government is keeping a closer eye on those since they are the ones handing out the dollars.
