The contrarian wisdom is that even if the aggregate debt-to-income ratio has fallen sharply in recent years, it masks financial stresses for those on low incomes, since most of the gains in income have gone to the already wealthy. The data, however, tell a completely different story. It is those in the bottom quintile of the income distribution that have the lowest median debt-to-income ratio. In general, the wealthier a household is, the higher its debt-to-income ratio will be. That correlation only breaks down for those at the very top of the distribution in the top 10%. If anyone is drowning in debt, it is the upper middle- and middle-class not the poor. Moreover, all income quintiles have seen their debt-to-income ratios fall sharply over the past few years.
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