Financial Peace errata: According to the Federal Reserve Board

Someone in Dave‘s office is playing pretty fast and loose with statistics.

From the Financial Peace University workbook, page 141 (no reference date given to tell us what “last year” means):

According to the Federal Reserve Board, consumers’ outstanding debt on credit cards and other revolving loans has grown continuously over the last decade hitting $1.5 trillion last year.

Guess what? According to the Federal Reserve Board, that’s a lie. Yes, total consumer debt did top $1.5 trillion in October of 2000, but “credit cards and other revolving loans” only made up 43% of that — less than half. So no, “credit cards and other revolving loans” did not hit $1.5 trillion. Even today, with total consumer debt over $2 trillion, revolving debt is just barely over $800 billion, with a long way to go to even the $1 trillion mark.

I say that so casually, don’t I? But man, the emotional impact, talking about that in class, would be huge. Talking about $1.5 trillion, and writing it out with every… single… freaking… zero, would make a hell of a lot bigger impression, I think, than talking about a mere $804 billion. If you’re thinking about how to get teenagers worked up about debt, $804 billion might as well be $1 billion. (Hmm, but maybe I could do something with “three quarters of a trillion dollars” or some such…)

Ah well. I’m at least glad that I checked the facts before I took Dave at his word and used his statistic in class.

Leave a Reply

Your email address will not be published. Required fields are marked *