by Michael Snyder, The Economic Collapse Blog:
Our entire economy is fueled by debt. In fact, if going into more debt was suddenly banned the U.S. economy would instantly hit a brick wall. For the vast majority of us, our lifestyles simply cannot be funded by what we actually make. So we use debt to bridge the difference, and this has particularly been true during the cost of living crisis. Total household debt has now reached a grand total of 17.8 trillion dollars, and we continue to pile up more with no end in sight…
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A quarterly report published this month by the Federal Reserve Bank of New York on household credit and debt found that between the first quarter of 2021 and the second quarter of 2024, credit card debt surged 48.1% while household debt — which includes mortgages and auto loans — rose by 21.6%.
In dollar terms, credit card debt rose from $770 billion in early 2021 to $1.14 trillion in the most recent quarter, while household debt increased from $14.64 trillion to $17.8 trillion in the same period.
I did not realize that credit card debt had risen by more than 48 percent since the first quarter of 2021.
That is extremely alarming, because it indicates that millions upon millions of households are literally living on the edge of financial disaster.
And the fact that delinquency rates have been climbing just underscores how serious things have become…
Amid American households’ rising debt burdens, delinquency rates have grown as well. In the last 12 months, about 9.1% of credit card debt balances and 8% of auto loan balances moved into delinquency — the highest levels since early 2011 and the end of 2010, respectively.
The primary reason why U.S. households are racking up so much debt these days is because the cost of living crisis has made it very difficult to make ends meet.
One voter that was interviewed by Fox News admitted that her money “went a lot further four years ago”…
“My family’s income hasn’t changed, but our comfort level has significantly decreased,” stay-at-home mom and homeschool teacher Persson said. “Money went a lot further four years ago. We were able to cover our bills and still have money saved. The economy has plummeted with the current administration, and to add on to that, where I live in California, the cost of living is much higher.”
Additionally, 44% of the survey respondents said they aren’t making enough take-home pay to cover their daily expenses.
Did you catch that last sentence?
Almost half of the entire nation is not “making enough take-home pay to cover their daily expenses” at this point.
Wow.
According to a recent survey that was conducted by CNN, the cost of living crisis is a major issue for approximately two-thirds of the country…
However, there are still times when the truth seeps out. CNN commissioned a well-constructed poll of about 2,000 random people to find out where they stand on personal finances. The headline number: nearly 40 percent of Americans are struggling to pay their bills. That is up from 28 percent from only three years ago, and a higher number than back in 2008–09, the period known as the Great Recession.
Two-thirds of people say that the number one issue they face is the cost of living and paying their bills. The typical American is spending nearly $1,000 more per month compared with three years ago just to pay living expenses. That is according to Moody’s, but it also fits with the intuition we all have
This is why household debt levels have been exploding.
Most people are just trying to find a way to make it from one month to another.
Unfortunately, economic conditions are really starting to deteriorate and large employers are conducting mass layoffs all over the nation.
For example, General Motors just announced that over 1,000 salaried employees will be getting the axe…
General Motors is laying off more than 1,000 salaried employees globally in its software and services division following a review to streamline the unit’s operations, CNBC has learned.
The layoffs, including roughly 600 jobs at GM’s tech campus near Detroit, come less than six months after leadership changes overseeing the operations, including former Apple executive Mike Abbott leaving the automaker after less than a year in March due to health reasons.
Considering all of the credit card debt that is being piled up, you would think that Mastercard would be doing well, but they have also decided to fire lots of workers…
Approximately 3% of Mastercard’s workforce are facing layoffs, with the payment services company slated to finish a “majority of the notifications” in the third quarter, the company said in a Friday statement to FOX Business.
Not to be outdone, Cisco has determined that it is time for “7% of the company’s workers” to hit the bricks…
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