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It's Getting Easier To Service That Mountain Of Debt


Economic Trends

IT'S GETTING EASIER TO SERVICE THAT MOUNTAIN OF DEBT

Just how severe are the current debt burdens of households and businesses? Still very heavy, if one looks at such gauges as the ratio of household debt to disposable income or the ratio of corporate debt to business output. But a lot less severe if one looks at the bite debt service is taking out of current income.

Economist Joseph G. Carson of Dean Witter Reynolds Inc. estimates that net interest paid by the private sector, which hit 13.6% of national income in late 1990, fell to 12.1% in the first quarter of this year, a four-year low. "The combination of declining interest rates and record refinancing of high-fixed-rate debt," he notes, "have made it easier for everyone to service debt--a development that bodes well for the upturn."GENE KORETZ


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