The Tragedy Of Bidenomics! Consumers Using Debt, Draining Saving To Cope With Inflation (Phantom Debt Soaring While Biden Makes Light Of The Disaster)

Biden, talking to CNN’s Erin Burnett, made light of America’s struggles with Bidenflation (higher home prices, higher mortgage rates, higher energy and food costs, higher …) caliously saying that “they can afford it.” Well Joe, your big donors (the top 0.5% can afford it! But not the middle class that you have abandoned. In fact, much of America has drained their savings and run up massive debt to cope with your terrible economic policies.

The amount of credit card debt across the US has hit a new record high of $1.337 trillion (even though it appears to have finally hit a brick wall, barely rising in April by the smallest amount since the covid crash), even as the savings rate has tumbled to an all time low.

To be sure, credit card debt is just a small portion (~6%) of the total household debt stack: as the next chart from the latest NY Fed consumer credit report shows, the bulk, or 70%, of US household debt is in the form of mortgages, followed by student loans, auto loans, credit card debt, home equity credit and various other forms. Altogether, the total is a massive $17.5 trillion in total household debt.

But staggering as the mountain of household debt may be, at least we know how huge the problem is; after all the data is public. What is far more dangerous – because we have no clue about its size – is what Bloomberg calls “Phantom Debt“, and have repeatedly called Buy Now, Pay Later debt. How much of that kind of debt is out there is largely a guess.

Five observations:

1. I watched a podcast talking over business-use (small-time guys), with them using credit cards to carry their monthly rent situation. On the list of top ten things to screw up and ‘kill’ your business...this is near number one.

2. Outrageous number of condos for sale in Florida at present...way beyond the market capability. Use Zillow and eyeball offerings. Reason? Insurance going up...along with HOA fees. If they don’t see them by drop-dead day with HOA? HOA will start court-process to seize your property....like they really need it or can find a market themselves. All of this will lead to several thousand condos in FL just sitting there....empty.

3. Commercial property being turned over to banks because of zero ability to market or fill the commercial property. This empty-era? In the case of California commercial properties...I don’t see them being used for at least ten years.

4. Just a lot of similarity to 1920s to late 1930s going on. Instead of bums camped on the outskirts of town...squatters are sitting in empty houses, with authorities unable to act.

5. Just about everyone with the WH team who are asked economic questions....give answers like you’d expect from a 11-year old kid. This is another funny detail related to 1930s under FDR administration...they also knew little to nothing about economics or business or banking.

Whoever wins in November....is to be given a 5-star mess, which is a collapsed economy and a mess taking five to ten years to resolve. I’d generally suggest to folks....down-size your debt presently, and prepare for serious bank issues, with tax increases required in 2025.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.