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Paying off debt is slower than ever in the past 29 years

Paying off debt became a little slower as the fiscal cliff fix comes into play. American households are spending less of their income to pay off debt than ever in almost 30 years, according to an article by the Wall Street Journal.

In the third quarter of 2012, 10.6 percent of after-tax income was spent on debt payment requirements. It hasn’t been this low since 1984.

The start of this came with the housing market bubble crash, according to an article in Economic Times. Since then it has been a slow recovery, and with more money going to taxes, it could slow down the amount of debt paid off.

“You have a lot of people refinancing their mortgages at lower rates,” Gennadiy Goldberg, an economist at TD Securities in New York, said to Economic Times. “Some homeowners have more money in their pockets to spend, which should be positive for the economic recovery going forward.”