The Perils of Consumer Debt on Display in South Korea

I’m looking at South Korea and thinking of the U.S. consumer. If you’re strapped with debt it won’t matter how low interest rates go. If you’re tapped out, you’re tapped out. Consider the plight of the South Korean consumer. What’s more, imagine what would happen to our own economy if the U.S. consumer one day woke up and decided that it was tired of debt. Yikes. From the Wall Street Journal:After the Asian financial crisis hit South Korea a decade ago, the government helped the export-dependent economy recover by pumping out money and convincing people to borrow and spend more.But this time around, the high household debt that accumulated in the past decade is depressing spending — an experience that has relevance around the world as governments seek ways to get consumers to help lift their economies.As exports drop and South Korea’s economy slows, a high level of household debt is keeping consumers from spending more and the government — like others elsewhere — is wrestling with the question of how much to intervene.