Middle Class 'Drowning in Debt'?

Middle-class families are "drowning in debt" because of the increasing costs of housing, education, and cars, according a new report by the Center for American Progress.The progressive think tank blames stagnant wages from 2001 to 2004 and the rising cost of big-ticket items, not frivolous consumption, for heavy debt burdens. Mortgage debt has increased by 29.5% for middle-class households, and education debt jumped 37.1% during the three-year period. "Families between 35 and 44 years of age saw their debt payments relative to income rise by 34.9%," says the report by CAP senior economist Christian Weller. Overall, middle-class families have seen their debt payments increase from 18% of total income to 20%. The rising level of debt means families are saving less, the CAP economist pointed out. "It ultimately exposes families to more risk," Mr. Weller said. "They are closer to the precipice if anything goes wrong." The CAP report is based on the latest Federal Reserve Board survey of consumer finances.