Dermot O'Leary: High household debt burden requires radical responses
Irish households must feel that they are running up a down escalator. After three years of reducing debt, to the tune of €28bn over the period from 2008 to 2011, household liabilities relative to income remain close to the scary peaks reached in the credit-frenzied boom years.
The household debt to disposable income ratio is a common metric for comparing debt levels across economies. At the end of 2011, this ratio stood at over two times disposable income. In other words, the aggregate debt level for all households is more than twice the combined disposable income of all households in Ireland.
It first breached this level in 2006 when total household debts reached €175bn. Over the following two years, Irish households added another €37bn in liabilities.