Bad Credit is Worse than Terrorism?

Bad credit is the most serious immediate threat to the economy according to a recent report by the National Association of Business Economics. The country's economists feel that bad credit - especially loan defaults and excessive debt - was a larger near-term concern than terrorism, gas prices, inflation and government spending.

This shift happened very quickly. In March, the study showed that 35% of economists felt that terrorism was the biggest risk. Now only 20% said it was their biggest worry:

"Financial market turmoil has shifted the focus away from terrorism and toward subprime and other credit problems as the most important near-term threats to the U.S. economy," said Carl Tannenbaum, president of NABE and the chief economist at LaSalle Bank/ABN Amro.

Economists did report that they expect the credit crisis to be fairly short lived, under 5 years. Medical care costs and an aging population were cited as the greatest long-term risks. Click here to read the complete report from the Associated Press.

Emily Davidson – Credit.com's Communication Director and former TransUnion credit expert. Emily writes about credit reports, credit scores, loans and personal finance as the CreditBloggers.com moderator.

Comments

[Urgent Credit Repair]

Great post - yes it does seem that with so much careless spending out there, we as a nation are in dire need of some "fiscal education" and we need to start teaching our young, fiscal responsibility!

-Dave

[Jim]

Why is it that a study is done to try to show what people worry about? Terrorism is not a consistent because sadly it operates on a 5-10 year cycle. The gas prices have bounced around for a decade and seem to average what happened in the 1970s. Inflation is constant and can't be avoided. Government will always spend money just as we always have to pay taxes.

When it comes to credit, there's something that we have some personal responsibility. Earning enough income and not to resort to credit, paying bills on time, the simple things that should be taught in high school econ. Now more than ever should be the point where the basics of handling money should be taught in school. There's a reason people get themselves into sub prime credit. I also think this is a wakeup call for those people who got rich from ripping these people off. The system will balance back out eventually.