Debt Expert Says Consumer Debt Pulls Down US Economy ROCHESTER, NY (WXXI) - A Rochester Institute of Technology business professor says getting the U.S. economy back into gear depends on finding a way to get consumers out from under staggering loads of debt.

Robert Manning is director of the Center for Consumer Financial Services at RIT. Last fall, he predicted an economic downturn driven by declining real estate values and too many Americans unable to pay off their credit cards.

Manning says the economy was being propped up by consumer spending, the real estate market and cheap foreign imports. He says all three of those are now failing, and the economy has stalled.

Manning says reviving the economy depends on getting consumers to start buying goods and services again. To do that, he says some system needs to be worked out to let ordinary people scale down their debts -- not just major corporations. Manning says Americans caught with high debt and a home that's no longer worth the value of their mortgage need to get into talks with their lenders -- and lenders need to let them repay on a schedule they can afford. Otherwise, he says the nation will end up in economic paralysis.

Manning has developed an algorithm that calculates household income, the current value of a family's home compared with their mortgage and other factors. He says a counselor can take that information to lenders and use it to negotiate lower repayment schedules that can let consumers work out from under their debt without bankruptcy.
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