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Credit debt is sinking the kitchen table economy

Credit debt is sinking the kitchen table economy

President Biden never loses an opportunity to brag about how he has produced the strongest economy in the world. The stock market is soaring to record highs. The Gross National Product looks good.  Consumer spending his high.  And Biden takes credit for creating more jobs than any President in history.   The “economy” is doing great thanks to President Biden’s signature “Bidenomics” policies.  So, he says.

Biden & Co. are seemingly bewildered by the fact that the American people do not agree.  As far as the folks back home are concerned, the Biden economy sucks.  As much as 60 percent of the working class say that the economy was better under President Trump – and they trust him to produce a better economy in the future than Biden.

Of course, Biden’s job creation claims need an asterisk.  Most of the jobs he claims to have “created” were the natural return of workers heading back to their jobs as the Covid Pandemic slipped into the rearview mirror – and the robust return was significantly due to the Trump administration producing a vaccine in record time.  Trump often says, “no one has seen anything like it” when talking about his accomplishments.  In the case of the vaccine, that is literally true.  If you look at the new jobs over-and-above the end of 2020, the real job “growth” has been rather anemic.

In terms of the consumer spending that is driving the economy, that also needs to be put into perspective.  It is not healthy spending.  American consumers are using – actually misusing – their credit cards to stay ahead of inflation while contributing to inflation.  They are buying now, hoping to pay off later.

The latest report on credit suggests a crisis.  Currently, credit card debt has reached an unprecedented $1.12 trillion.  With 15 percent of credit cards maxed out.  The delinquency rate is the highest in 12 years – and that was in the middle of what has been referred to as the “great recession.”

The delinquency rate varies significantly by generation – hitting hardest on Gen-Z at 15.3 percent.  It is 12.1 for Millennials, 9.6 for Gen-Y and 4.8 for Boomers.  For millions of Americans, the credit crisis is not looming, it is here and now. 

The issue for the average person or family is the “credit trap.”  That is when they can barely keep up with the monthly interest charge – much less pay down the principle.  As a result, they are often forced to pay the required minimum – and that is nothing less than credit enslavement.

We have all seen the portion of the bill that explains how long it will take to pay off the debt based on the “minimum payment,” it is years and even decades.  AND … that is the case only if the person does not use the card ever again.  Charge a few more items, and the interest costs to up and payoff stretches further into the future. 

Based on income and other expenses, paying off the credit cards becomes essentially an impossibility.  People are stuck forever with that exorbitant interest payment each month.  For some, the interest on their credit debt is higher than the car payment — or even the interest on the mortgage.

Falling into the “credit trap” is not limited to folks who have maxed out on their credit cards, it is merely the point where the monthly credit payment cannot be paid from current income.

The unfortunate truth is that credit buying cannot continue to float the economy.  As more and more people fall into the “credit trap,” their ability to spend on credit will decrease.  That will result in lower consumer purchasing.

That may already be starting.  Consumer purchasing took a significant drop in April – and 2024 was still running 30 percent below the Trump 2020 levels.

While credit card spending is temporarily good for the stock market and the GDP – and gives a false appearance of a strong economy — it has been a worsening disaster for more and more Americans.  And this on fop of student loan crisis created by Democrats – with Biden playing a key role in Congress.  Peddled as a benefit to students, the loan probrams was designed to benefit the banks and enrich the colleges and universities.  In that regard, it was unfortunately very successful.

Folks caught in the credit card trap have few options – and none of them are easy or good.  They can try to cut expenses further or add to their income.  They can default or file for bankruptcy.

The only thing Uncle Sam – who caused the crisis – can do is to try to write off student loans – an unfair and offensive plan of dubious constitutionality.  Neither Biden nor the Congress can do that with personal credit card debt. 

In the longer run, Congress could take up a comprehensive credit reform bill (which I have been proposing since the crisis of the 1970s) – but that is a long-range solution and one I will cover in a future commentary.

It is a simple truth that you cannot borrow your way to economic health and security – whether you are a person or a nation.  And no among of campaign happy talk by  Biden can alleviate the economic pain and suffering endured by millions of Americans.

So, there ‘tis.

About The Author

Larry Horist

So,there‘tis… The opinions, perspectives and analyses of Larry Horist Larry Horist is a businessman, conservative writer and political strategist with an extensive background in economics and public policy. Clients of his consulting firm have included such conservative icons as Steve Forbes and Milton Friedman. He has served as a consultant to the Nixon White House and travelled the country as a spokesman for President Reagan’s economic reforms. He has testified as an expert witness before numerous legislative bodies, including the U. S. Congress. Horist has lectured and taught courses at numerous colleges and universities, including Harvard, Northwestern, DePaul universities, Hope College and his alma mater, Knox College. He has been a guest on hundreds of public affairs talk shows, and hosted his own program, “Chicago In Sight,” on WIND radio. Horist was a one-time candidate for mayor of Chicago and served as Executive Director of the City Club of Chicago, where he led a successful two-year campaign to save the historic Chicago Theatre from the wrecking ball. An award-winning debater, his insightful and sometimes controversial commentaries appear frequently on the editorial pages of newspapers across the nation. He is praised by readers for his style, substance and sense of humor. According to one reader, Horist is the “new Charles Krauthammer.” He is actively semi-retired in Boca Raton, Florida where he devotes his time to writing. So, there ‘tis is Horist’s signature sign off.

20 Comments

  1. Frank stetson

    Were you better off four years ago? Under Trump.

    That would be May 23,2020. It was two weeks after Trump told us to drink bleach. NJ was telling NY stay away from our beaches. Most figured restaurants would never come back. Unemployment was over 15%, market crashed, gdp in the shitter.

    It did not get better. And on 1:6/2021 it got worse. And Horist wants to return to that.

    .

    Reply
    • Archie

      You’re still sucking Biden’s cock.

      Reply
      • Rick

        Only an ignorant liberal would follow through and drink bleach. Maybe Trump was referring to Chlorine Dioxide Solution, which is not bleach. Trump cant help it that liberals are ignorant and have to be taken by the hand. Unfortunately, all of the years of liberal lunacy has destroyed our country. It is so far gone now that it is unlikely that anyone can save it especially with liberal loons working so hard night and day to kill it. The other day, I saw a man driving with a Biden bumper sticker on his car, and I shook my head and thought, they really do exist.

        Reply
        • frank stetson

          It’s a blessing to forgive Rick. You’re an ass to cover for him, that’s not what he said. He said it, he meant it, he never apologized or even explained it. Give me a break.

          You are asking me to vote for:

          – a guy who has released criminals and wants to release the 1.6.2021 criminals as patriots.
          – a guy who probably tried to rig and cheat the voters on both the 2016 and 2020 elections
          – a guy who ran up the largest deficits and debt in our history
          – a guy who delivered the WORST gdp growth since Hoover
          – a guy who today said IF you vote for me, I will release the journalist Putin is holding. If you do not, he will never go free.
          – a guy who promises to be dictator for a day, weaponize justice and seek revenge on his “enemies.”
          – a guy who claims roe v wade overturn is his gift to girls who should be punished if they try to seek their own wellness
          – a sexual abuser, a digital rapist
          – a guy who defames women, wants to execute innocent young blacks, send his mob against volunteer election workers, judges, court clerks, anyone in his way
          – a guy with a convicted criminal enterprise
          – a guy who has a communist party member living in his back yard
          – a guy who made millions off the Russians and has more of that type working for him and his campaign

          And so much more that you ignore.

          But do you remember his “PLAN” to replace ObamaCare. How is Trump healthcare helping you? Do you remember infrastructure week? Every week? Do you think you were better off four years ago? That’s 5/24/2020 when you were huffing bleach, out of work, and praying your would not be one of the million that died on Trump’s watch during covid that he initially ignored. And that’s the biggest one:

          UNDER TRUMP, the US response to covid was one of the worst in the developed world. Here’s one article, but everyone who looks at this concludes that the US, under Trump, was best prepared but failed miserably to respond resulting in higher death rates and more death, unnecessary deaths. *https://pandemics.sph.brown.edu/why-did-best-prepared-country-world-fare-so-poorly-during-covid*

          That’s where you were four years ago. In debt, under water, unemployed, and facing death.

          Reply
          • larry Horist

            Frank Stetson … You remind me of one of those dolls with the pull string. Pull the string and the same old message comes out. When your string is pulled you come out with the same old list of grievances. zzzzzzzzz You efforts at shaming Trump voters can be seen by what they are — feeble attempts to give yourself a sense of superiority. At least you have Tom to give you a modest level of satisfaction — but that is understandable since a “sense of superiority” is your common bond.

          • Rick

            Trump also fast tracked the poison poke that you ran down and got. This country is evil and Trump will not be allowed to save it. Trump is just the other wing of the same bird. They get their orders from the same evil source. You can look at JFK to see how going against them turns out.

          • frank stetson

            Oh Larry, I just love it when you take me apart on the issues avoiding personal attacks and name calling. NOT. Not one issue mentioned, just personality traits that get under your skin and make you all itchy and in need of a good spanking……

            You are upset and herky-jerky over my oft repeating world-o-Trump laments, although they are all TRUE. Somehow, you believe that the truth of Trump is intended as a tool of shame for voters. Why would the truth shame them? Doesn’t shame you, so what’s their problem? Why do you feel they are so weak?

            Meanwhile, and just saying —- Trump has been on the political stage for less than a decade’; that’s my repeat timeline. You spew the same old stew since the 1960’s —— want to see a copy? Talk about feeble.

            But on the issue —— all that shaming was based on true facts. I am glad you attach the concept of shame to them To bad in your lust to win, you toss your own values aside for this man to vote for him yet a third time. I have never sunk that low for any Democrat. Again —- you win!!!

          • frank stetson

            Rick diving deep in the shallow end of the pool.

            Yes, Trump fast tracked the government process to get the vaccine he secretly took himself while his party rejected it in favor of an early death.

            But Pfizer accepted nothing except contracts from Trump, so blow me.

            And Trump totally fucked up distribution in the beginning so lost a lot of time, a lot of people over those supply chain screwups.

            As to “evil bird,” tell us more comrade.

          • Rick

            Frank Stetson, the human that knows everything. Just ask him. It is comical how when a subject comes to you that you do not know anything about, you accuse the messenger of being shallow minded when it is you that do not know anything about that subject. There is a lot that you do not know Frank. When I was young, I knew it all, kind of like you do now. But, I grew up.

          • frank stetson

            Rick et al: I come here to discuss the issues, based on facts, supported sources listed when needed. Obviously I enjoy the discussion, it’s a learning experience for me, and I am a bit sarcastic and sharp. Maybe even a direct jab or tow, but usually not until provoked first.

            Rick said: “Trump also fast tracked the poison poke that you ran down and got. This country is evil and Trump will not be allowed to save it. Trump is just the other wing of the same bird. They get their orders from the same evil source. You can look at JFK to see how going against them turns out.” Now, his “fact” is Trump fast tracked. His descriptors included poison poke, obviously he did not get, so an idiot, but I did not go there. He also claims the country is evil, Trump is physically stopped from saving it (gee, didn’t he have his chance?), and there is some evil source above it all. I let all that go. I looked up the fast tracking and wrote up what I found. Rick dumped on me in response.

            I don’t get it. Why can’t folks discuss things a bit at least before going postal? but my response to Mr. RIck.

            Thanks for your assessment, Rick. However, you did not disprove any of the facts, and support, I provided and, instead, basically said I accused you a being shallow. I am sorry, I meant you were taking a deep dive in the shallow end of the pool. It’s a weird way of saying long walk off a short pier. Comments that are killing you…..

            I agreed with you that Trump fast-tracked the vaccine. However, I noted that Pfizer accepted nothing except contracts from Trump, the only effect Trump had there was fast-tracking the government procurement process and absolutely NOTHING to do with the speed of development by Pfizer. They are on record stating that and are quite proud, obviously, of their accomplishment. FYI: who are they in this: Pfizer is responsible for over 2/3rds of the vaccine across the entire globe. I bought their stock before the pandemic. I remember. It was glorious.

            I also noted that Trump totally fucked up distribution in the beginning so lost a lot of time, a lot of people died over those supply chain screwups. Well reported as in: “The success of Warp Speed was tempered almost immediately by distribution” from *https://www.governing.com/health/the-u-s-bungled-its-covid-19-vaccine-distribution-why-no-accountability* Plenty more, look. The important part is getting the needle in the arm, not just in the lab or even factory.

            Since you opted for personal attack versus agreeing or disagreeing on the facts, I take it you cannot prove anything amiss in what I said. And that’s the point right? To try to get to the truth? I am not sure why the vitriol.

  2. Frank stetson

    Archie; you seem to talk about that way too much. It’s the best you got, I guess. I don’t know you, you don’t know me, do you think it has an effect?

    Reply
  3. Darren

    Frank, I personally do not care who you vote for.
    No disrespect, but if a person can not smell the dog shit he has stepped in, then
    it really will not bother him as he just does not realize his actions.
    I hope you vote for Biden and throw your vote away.
    You mat be the last guy still making buggy whips.
    I will put fuel in my car thank you!

    Reply
    • Tom

      Well Darren, speaking of dog shit, what do you think Trump is feeding people. Maybe your words can be applied to you as well my friend! Yet, I do find it amazing that being a Trump supporter that you hope people vote for Biden.

      Reply
  4. Carey Marshall

    Considering that, as it turned out the very things that they were accusing President Trump of doing and actually used to “impeach him”, turned out to not be things that he had done, but the very things that THEY THEMSELVES had been doing for years. No wonder they knew all the ins and outs of how it was done. It is sad the the majority of the Democrats laid their reputations down at the feet of President Clinton when he disgraced the office of president, Ignored it when Hillary Clinton as Secretary of State, turned over and went back to sleep instead of getting help tho Senator Stevens and those with him & it cost them their lives because they depended on her help! Now they are laying their reputations down again at the feet of a president that cannot seem to find his way off a stage, doesn’t seem to know that the border Crisis is a Crisis, Doesn’t understand how finances works, You can’t spend your way out of debt, you have to pay it off to get out of debt, but he can’t figure that out so we are even further indebted to China. Need I go on further? The big question is, why is Biden to afraid of Former President Trump that he has to go to such lengths in an effort to destroy him? Is it because if President Trump gets back in office, the evidence of Biden’s crimes will be much easier to find? The Truth will come out and we had better pray that it is sooner rather than later, before Biden & his cohorts can completely destroy our country! 4 years is to long to suffer under such non leadership.

    Reply
  5. Carey Marshall

    Oh, & I failed to mention that he has broken his oath of office in multiple ways, in fact started doing so on Day 1 of his administration. Doesn’t say much for him and he should have been removed as soon as he broke that oath!

    Reply
  6. frank stetson

    Darren, thanks for the kind thoughts, but no buggy whips. I am mostly supporting the banks, who support whoever they want, maybe even you.
    Maybe buggy whips, who knows. After that, municipalities and the country via bonds and bills. With a little big business America on the side, but not much. And then, Solar Winds, because I feel for those been hacked and I had relatives working there. Didn’t work out, no bounce back yet. Did cop some Pfizer on a downturn, looking good even in the crash, about to sell for a year’s profit in six months….cool.

    Again, thanks for the thoughts, but no buggy whips here. I do drive a hybrid, 50mpg, will probably get an ev on the deals soon. But also use a 350 v8 classic truck at 12mpg. I put extra springs, heavy duty road rally shocks recently and this bitch corners like my wrx now, so not letting that joy go. Only problem is I can feel every pebble on the road now……

    But again, thanks for the personal thoughts and glad you have no issues with the Trump issues I pointed out. He is indeed a bad, bad, man and I hope they convict him. Actually really hope they do.

    Just too bad he’s too much a pussy to go to court on the other indictments. But a girl has to do what a girl has to do and Trump —- he no can testify. He just can’t say more than “I don’t recall.”

    Reply
  7. frank stetson

    Anecdote alert: I am one cheap bitch, no doubt about it. Yet, I run a four-digit, usually around 5k, but lately up to 10k, credit card balance every month. My limit is over 30K and have exceeded that when college time. In my entire long life, I have maybe paid 10 cents in interest. Why? Because I get thousands in rewards each year which I convert not into products but into gift cards, free money, that I use to buy things on deep discounts. Yeah, I am that cheap. All my utilities, purchases, whatever does not have the 3% add-on goes on the card. And the protection from the card outpaces the risk of credit fraud. I have let Mastercard fight my supplier battles many times, I do not suffer fools, and having the MC 800-lb gorilla fight my payment battles is priceless. Just send an electronic note, they refund me conditionally immediately and the final disposition, always in my favor so far, happens three months or so later. It’s priceless. I got Microsoft to pay off on virtual SW, iTunes on virtual music — that was impressive. Not to mention MC provides great data records to help me monitor.

    The best was when I put my mother’s last nursing home stay on the card and they billed me heavy, in advance. She passed, as expected, God bless her soul, and they refunded the over-payment via check meaning I got the rewards. Mom, who taught me the art of cheap; depression baby that she was, and who could get three meals out of one spaghetti dinner (spaghetti and meatballs, lasagna from the leftover meatballs, and then spaghetti – no meatballs: and by the way, no extra meatballs on your plate for the first meal……) smiled down from heaven. She always called a double discount like that a coup. Like using a coupon on a sale-discounted item. A coup.

    I get my rewards, convert them to gift cards, like a Panera gift card, and then have them free deliver bagels on Tuesday when you get a half dozen free on top of a dozen. I am that cheap. This year I stopped paying estimated taxes expecting a bad year. I mean Horist told me Biden was economically challenged and the sky was falling. Instead, it was our best year and I racked up a five-digit tax bill so I was cash strapped and really ran a high credit card bill this Spring. But it had nothing to do with a bad economy, just that I got lucky and did not expect the blue bird. NTW about my “success,” now based on that I AM paying estimated taxes and will probably flip the whole thing next year with a huge refund after being strapped for pre-paying a not-needed five digits in estimated this year. As Mom would say, “a good problem to work.” Sorry, Horist, for my story. But there’s a really high balance that added no debt at all. Just saying, it happens.

    Seriously, no matter how you slice it, more debt is usually a bad sign of something. Not always, but often. Even in my case, I paid more than expected, so bad. With proper planning, I would have spent less in total, so bad. More delinquencies, always worse. And we have both. We also have an all time high, but we have been all time high before. Fairly recently. Under Trump we got pretty close too. And we have more people, inflation, and are still getting economically over the pandemic.

    A recent spike in debt occurred in 2008 under Bush where we ran it up close to 900B; then the crash. It cratered by 2014 and then began to rise. Under Trump, yeah free-money Trump, it climbed every year after he took office. Did Horist complain? I don’t know. It spiked again at well over 900B in 2019. Then it crashed under Trump too, pandemic, free money and pay down the debt. It cratered in 2021 under Biden and has skyrocketed since then to the current over 1T which is only 100B over Trump’s record debt.

    If we use conservative arguments reserved for minimum wage economic discussions on PBP, maybe these people need to get better jobs. You know, those jobs they have were not meant to support those types of lifestyles. If we use Horstian economicss: then Democrats bad. If we use Trump arguments, just claim bankruptcy and then get a loan. If we use Biden logic, let’s forgive them all. Whatever.

    If we use Stetsonian arguments, we would look deeper into the data, forget the Democrats-be-bad rhetoric and try to discover micro trends in macro data. That’s what I will do next.

    Reply
  8. Tom

    Larry, Sometimes this Independent/unaffiliated voter is amazed by you at the imbecile you truly are my dear friend!

    You say, “Frank Stetson … You remind me of one of those dolls with the pull string. Pull the string and the same old message comes out. When your string is pulled you come out with the same old list of grievances. zzzzzzzzz You efforts at shaming Trump voters can be seen by what they are — feeble attempts to give yourself a sense of superiority. At least you have Tom to give you a modest level of satisfaction — but that is understandable since a “sense of superiority” is your common bond.”

    Larry, the reason Frank’s story is the same is because it is the truth! The truth never changes and is the reason why you cannot argue it. Trump cannot speak the truth because the truth is not in him. And it appears to not be in you either. So all you can do is try to shame by saying “same old grievances”. Larry, in case you have not figured it out, its about character – and that is the point. Its the same old Trump doing the same old thing and you are the same old Larry making excuses for a truly rotten person.

    If Trump voters feel shame, then that is their internal warning system going off that they are about to be sucked in by a liar, thief, tax cheat, rapist, adulterer, communist/authoritarian sympathizer who delays and defies justice every chance that he gets.

    Larry, nobody exhibits a sense of superiority more than you. You mistake superiority for wisdom because that is what you are into, superiority and power politics. What Frank listed is the truth that he keeps issuing as a wake up call to those that are snorting the Trump-caine. You and many others are addicted to the Trump like an addict is addicted to cocaine. All Frank is trying to do is get you to realize your addiction. He wants you to see how you have lowered your integrity and sold your soul for a man that could care less about you or the country. Trump only cares for Trump. He doesn’t even care for his wife. Trump is a sociopath narcissist who lies constantly – and you are justifying all of the lies for another shot of Trump-caine. Trump does not care about you nor the working person – he just needs you to pay his legal bills which many like you Larry gladly do.

    Frank is just trying to get you to see how far you have slipped, and how addicted you really are to the sociopath narcissist.

    Finally Larry, you are so weak that you have to pull my name in to somehow bolster and justify your ridiculous comments to Frank. Larry, you made no good points, and all you did was spew words of criticism just like your idol Trump. Larry, get a backbone and stand on your own two feet without needing to pull in me.

    Reply
  9. Tom

    This article gets a Stop The Spin rating of STS-3. Here is why:

    1) Larry says the following (and he is correct) when he says, “It is a simple truth that you cannot borrow your way to economic health and security – whether you are a person or a nation. And no among of campaign happy talk by Biden can alleviate the economic pain and suffering endured by millions of Americans.” DAMN SHAME NOBODY TOLD TRUMP THIS AS HE PUT ALMOST A TRILLION DOLLARS OF WEALTHY TAX CUTS ON OUR NATIONAL CREDIT CARD AFFECTIONATELY CALLED, “THE NATIONAL DEBT”!!! THANKS GOP! THANKS LARRY!!!

    2) Biden has attempted to work for the people and lower credit card debt. He has tried to limit late fees to $8.00. This would save Americans up to $10B in late fees. Guess which party put a temporary hold to this new law??? Yup, the GOP!!! The party of Larry and his idol Trump! Judge Mark Pittman of Northern Texas (appointed by Trump) put the temporary kabash on Biden’s plan to help the people. See *https://apnews.com/article/credit-card-late-fees-banks-cfpb-biden-85e1b89c16670c28c3ec311e8519547c*

    3) Article wanders (like Larry’s aging mind) from credit card debt to student loan debt in a possible attempt to influence voters by conflating credit card debt and student load debt to use both as a single entity against Biden. Shame on you Larry!! Its time you get back on your Galantamine, rivastigmine, or donepezil . Biden has attempted to reform the FAFSA Student Loan system but continually gets obstruction from guess who? Yup, GOP – the same people that obstructed a reform of Border security that even the GOP designers of the reforms says was a good reform and should have been passed!

    4) This inflationary cycle started with Trump dumping money in the form of pandemic checks (sent with love from Trump claiming to be the source of all goodness and free money) and then almost a trillion dollars of tax cuts for corporations and wealthy. Biden just continued it and got stuck with it but made it worse with free rent and other goodies instead of letting the market (which Larry loves) settle it. It is the fault of both parties.

    5) Article sort of back-handedly attempts to blame Biden for the rise in credit card debt but makes no mention of the fact that Biden cannot control people’s spending habits.

    Credit card debt is a problem and Larry is right to call it out. He’s just inaccurate (as usual) by omission. This is his spin expertise. The problem will not go away until people learn to control their spending habits and live within their means. Period!

    Reply
  10. frank stetson

    Horist begins by outlining the credit enslavement process as if someone is doing it to those people. College loan people been saying that for years, Mr. Horist. Truth is no one is making them buy things on credit. Most of the credit uplift this quarter is cars and houses. Consumer goods debt is down, this quarter, typical for the first quarter, but still down.

    Then he explains the effect on consumer purchasing not including the Fed’s interest rates as a potential contributor. Or it could be the terrible Spring weather in the NE and other places. Target is saying their bad numbers are due to people buying only what they need. Anectdote alert: I was in Lowes on this beautiful WEDSDAY, after our first full week of decent weather. I had to leave; the place was coming apart at the seams with every piece of yard machinery known to man rolling out the door. I almost bought stock that day…. But, whatever the reasons, a slow down in first quarter buying for sure with an uptick in car and home debt.

    Horist states: “The only thing Uncle Sam – who caused the crisis” where only a conservative in heat would blame the government for the credit card economy. That’s ridiculous. First, the Federal Reserve Board chair was appointed by Trump as were a good portion of the current 12-person board. They are the nation’s bank causing the current high interest rates to bring down inflation. They are also the ones issuing the report Horist is using to make his case. Horist has already admitted, begrudgingly, that inflation caused by free money created during the pandemic by both sides with Trump going over the top with his 4q20 elect-me hand-out, and Biden’s 1q21 thanks-for-electing-me handout.

    Here’s the real government report on the Q that paints a different, yet accurate picture from the one Horist spins: *https://www.newyorkfed.org/newsevents/news/research/2024/20240514*

    Note the segment changes where mortgages up (given the interest, the same number of new mortgages would be higher in value), auto loans are up (again, even if equal number of cars, loan values would be up), actual other credit card charges down (they say that’s normal 1q stuff), and college loans down, that’s good, guess they are smarter….

    OK, people buying houses n cars, not so much other stuff, that might be considered good. Delinquencies are up, that’s always bad. But the report is not a solid bad across all segments. I could cherry pick the good points, but will let you consume.

    Second point: this is an all time high. The trend is concerning, but we have been here before and given the pandemic, the Fed actions, it could be anticipated. Remember, credit card debt fell dramatically during the pandemic as many took their free money to pay down debt. As I noted before, a 2008 all-time high spike under Bush ran it up close to 900B; then the crash. It cratered by 2014 and then began to rise. Under Trump, yeah free-money Trump, it climbed every year. Did Horist complain? I don’t know. It spiked again at well over 900B in 2019 on Trump’s watch. Then it crashed under Trump too, pandemic, free money and pay down debt. It cratered in 2021 under Biden (does Horist give him credit?) and has skyrocketed since then to the current over 1T which is only 100B over Trump’s record debt. That’s a 10 percent problem over Trump which didn’t bother Horist.

    Third point: it’s the youngster’s leading the debt advance. Now, you can make a case that cars and houses running up the debt might be a good thing as they get started in life with home and car-for-job. But probably a little naivety involved in the size of the purchases. Same naivety that drove the college loans perhaps.

    Here’s a nice analysis of debt: *https://wallethub.com/edu/cc/average-credit-card-debt/25533* It notes a 15% year or year rise, and that’s high. The average balance per household though is down from 2008, down 10%. Horist does not note that. No spin value.

    The most important part in all this is the delinquencies. Delinquencies peaked in 2009 at 6.7% according to the FED. Then they crashed. They began picking up again in 2015, gaining steam under Trump and reaching a peak of 2.66% in 2020 under Trump. Then they crashed hitting 1.54% under Biden before this pandemic-inflation-younger people rise to its current rate of 3.16% which is less than half delivered by the Great Recession on Bush’s watch and only half a point higher than Trump’s peak. This is the one to watch, one expects it to get worse, but really not sure if it will reach an all time high yet. Here’s the delinquency timeline from the FED: *https://fred.stlouisfed.org/series/DRCCLACBS*

    Bottom line: concerning but not apocalyptic. Yet. And caused by a combination of Trump and Biden management of the economy, with pandemic gyrations on top. Personally, I can’t understand. It’s not in my DNA to pay interest. I have one my home, we call it investment, but it really isn’t. And I took one once on a car, but that was specifically to build credit —- I had the cash but ran a couple of years credit to build credit to get the first house. Both side of my family has been like that for generations.

    Mr, Horist, not everything is us or them, win or lose. Most often, we are all in this together having each of us taken part in what’s happening. These things are also cyclical; we will see another debt spike record and delinquency spike record again. Just hopefully not delinquencies, not this time I hope. But I certainly would not blame Biden because some youngster defaults on their credit card. I could just as easily blame Trump for showing them how to go bankrupt and come out smiling. He did it, we bankrolled him, what —– like a half dozen times? Nope, won’t go there. Would rather talk about how he got her alone, pinned her against the wall………..

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