George Erickcek, W.E. Upjohn Institute senior regional analyst, addressing the Holland Area Chamber of Commerce recently, said the United States is a “nation of grasshoppers,” referring to the fable about the hard-working ant and freewheeling grasshopper.
“We spent $121.3 billion more than we made — nationally,” Erickcek said.
But while some debt can be damaging, not all debt is negative, local economic and financial officials say.
“I think it does make sense for people to have debt, like when they buy a house,” said William Bjork, financial consultant and vice president of investments for A.G. Edwards.
Bjork said people should always try to spend less than they make, except in circumstances such as buying a house, paying for education or making a career change.
“I look at those times as times in a person’s life when they’re doing something strategic to improve their situation,” he said.
Dan Giedeman, assistant professor of economics at
“The main question is, when I’m going into debt, do I have a clear plan of how this is going to be paid off,” he said.
Giedeman said many people are optimistic when they take on debt, assuming that times will get better or a business will succeed.
“Debt can be good if you have a very clear plan for how you’re going to pay it back, but if you don’t, then you should be concerned,” he said.
The number of
Nicholas Danner, credit counselor with GreenPath Debt Solutions, said credit cards, cash advances and payday loans can cause a problem if they create a cycle of dependency.
“That can definitely be a debt that you don’t want to have,” he said.
Other debt to be cautious of is unpaid utility bills and medical bills that may go to a collection agency, he added.