Every time I dig into numbers in a media report, I typically find a real mess. Russell Roberts finds the situation even worse than average in the recent Washington Post article on middle class finances.
The debt figure of $55,000 in 2004 (which supposedly is 151% higher
than in 1989 to pay for day-to-day expenses) is actually ALL forms of
debt INCLUDING mortgage debt. So how can that be? How can the median
family have only $55,000 of all kinds of debt when there's $95,000 of
mortgage debt all by itself?
That's because each line of the chart (other than the top line and
the bottom line) is a subset of all families and a different subset.
So among families that have mortgage debt (maybe 40-50% of all
families) the median mortgage debt among those families is $95,000.
But among families that have any kind of debt, (about 3/4 of all families) the median indebtednes including all kinds of debt
is $55,000. That includes mortgages debt....
So you can't add up any of the lines of the chart or even compare
them to each other. They're each for a different subset of the
population, the population who have that kind of debt or asset.