Credit card debt hits new record, raising warning sign

Credit card debt hits new record, raising warning sign

https://www.usatoday.com/story/mone...s-new-record-raising-warning-sign/1014921001/

"Revolving credit, mostly credit cards, increased by $11.2 billion to $1.023 trillion, the Federal Reserve said Monday. That nudged the figure past the $1.021 trillion high-water mark reached in April 2008, just before the housing and credit bubbles burst. Over the past year, revolving credit has surged by $55.1 billion, or 5.7%, according to the Fed and Contingent Macro Research."

Haven't we seen these signs before? The GWB tax cuts on top of the housing bubble making people feel prosperous and take on debt that they couldn't afford? Eventually, the whole house of cards came crashing down due to private debt overhang.

Now, we have tax cuts on top of an already overheating economy and a booming stock market. Who is going to bet that the scenario is going to play out exactly the same as it did in 2003-2008? We already start seeing the "buy now pay in 24 months" schemes to part people off money they don't have, and the consumer going into more debt (see cited article), coupled with a diminishing savings rate.

What could possibly go wrong? I tell you what can go wrong: The system is TOTALLY unprepared to react to another private debt-based recession. Interest rates are low, the government is taking on additional debt to finance the tax cuts that benefit mostly the top, FED balance sheet is still not wound down... Where is the stimulus going to come from in the next downturn? And that downturn WILL happen, it is not a question of if but when.

 

Unfortunately, we are borrowing our way to an illusion of prosperity at both the personal and state level.

What’s the old saying?

Democrats tax and spend.
Republicans borrow and spend.

 

Credit cards are issued to individuals are they not? How it that a societal/political problem?

I would think that credit card spending is due to the ever growing commercialized holidays, “cyber Monday”, etc. though, not politics.

Not to mention the ease of one click purchasing that is available on everyone’s phone through Amazon.

 

Amazing how credit card debt suddenly became a problem that Democrats took notice of on January 20th, 2017.

 

The party of managed decline, 1-2% growth new normal, now preaching doom and gloom.

I predict the economy will continue to grow exponentially as the hands of the private sector are untied and the burden of illegal immigration is lifted.

The Blue Wave is coming 2018. Everyone hates Trump as much as you do and thinks the country is doomed. Tell your friends.

 

You have to have "credit" to get debt. People are obviously moving up.

 

As if he entire last presidency never existed right? 11 TRILLION dollars worth of borrowing from the democrats? Like that just never happened at all? Laughable.

 

Collectivist have 0 standards. They give their own a pass for the same things they crucify republicans for.

 

It is a societal problem because the last great recession was caused by too much private debt. We also know the policies that led to the debt overhang. We are now repeating these same policies.

 

and republicans want to deregulate the financial institutions again. they did not learn the lesson from 10 yrs ago

 

How do you suggest we teach people to be financially responsible, and manage their debt/income ratio?

Again, loans are made to individuals. How do you go about stopping people from spending money they can’t pay back?

Teaching people to avoid making minimum payments on credit cards would be a start in my opinion.

 

Making America unprofitable, shipping our jobs over seas, and flooding our country with unskilled 3rd worlders, is how Democrats make an economy go. Seeing all the red tape your party has wound around the average citizen being cut, must be difficult for you.

Don't worry, 2018 will bring the Blue Wave. Everyone hates Trump as much as you do and the economy will be in shambles by then. Tell your friends.

 

This thread is about private debt, not government debt. So, take your ridiculing of Democrats elsewhere.

 

What BS. You yourself inserted the weight of government borrowing. You also asserted your discomfort of those who also privately hold debt. You seem positively conflicted. You like debt, and then you don't. You recognize the weight but then you equivocate.

So, here's the better analysis. Is there an absence of capital that underpins the debt? Are you seriously worried now about those of us who provide that capital? I don't buy it for a second.

 

Democrats say debt is not a problem.

 

When folks have enough money after utilities and rent to save and not live paycheck to paycheck, this will change. Today, folks who do the most buying, don't have the money they used to and it isn't worth what it was. The last recession stopped short of resetting all of this. That leaves the door open for another. Obama may have done more harm than good with good intentions.

 

Trump is like Herbert Hoover Hitler; he must be impeached or the economy will die.

But if the economy dies, he won't be re-elected, so totally worth it.

 

So, Obama's policies didn't work since it's been steadily increasing since 2011...



http://www.businessinsider.com/credit-card-debt-in-feds-severely-adverse-scenario-2017-6

 

Level would be best, with it increasing as the population increases and wages continue holding value while cost of living stagnates. That's not going to happen in this world today.

 

Except for a mortgage and possibly a car payment, debt is always a bad thing. Period. Even education is a real bad deal on credit.

The only reason to have a credit card is for convenience and pay it down to zero every month.

It takes mental discipline to manage money. Only use a credit card for credit in a true unforeseen emergency and dig yourself out of that hole fast.

When Madison Avenue depicts someone who can get this card or that card as a real somebody on TV, that's pure grade D bullshit -- but economics is Darwinistic -- the strong minded dominate the weak minded.

 

Yes, financial education is a very important aspect, which should be included in the school curriculum.

You'll note, though, that it is not in corporate interest to have a financially educated populus. If they were, they wouldn't spend so much money on stuff they mostly don't need. But, spending must be sustained or even increased, as the consumer is the engine of the economy. How to do it when wages are flat? With private debt.

That's exactly what the aim of this tax cut is: Make people FEEL prosperous (even though fundamentally they are not), so they go out and spend using the credit card. It is exactly the same scenario that played out in 2003-2008. Why would anyone expect a different outcome is beyond me.

 

I don't have any personal debt, so why should I hold discomfort? I also have a recession proof job.

However, I see a fundamental problem that private debt can't grow indefinitely, since eventually creditors run out of competent borrowers. When that happens, we get near depressions like in 2008, followed by years of bad economy due to private debt deleveraging. This is not hard to understand. But you don't seem to have a problem with recreating the exact situation that led to the last near depression.

 

Not answering the question doesn't seem to be constructive.

 

What question didn't I answer? Maybe the question you wanted answered wasn't clearly stated?

 

ah, already trying to explain the Trump economic downturn I see

the Trump tax cuts for the corps will do more harm then good long term