One cannot draw blood from a stone. Likewise, one cannot pay money that one does not have. The debt-burdened people of the US have been saddled for a long time, and in spite of tropes that the economy is doing better, the reality is that the people are hurting badly, having been enslaved to debt by series of actions, some of their own doing and some not of it, and some of it forced upon them by the immoral monetary system.
According to a recent report, large numbers of people and especially Millennials are simply not paying their credit card debt because they do not have money:
Student-loan debt hit an all-time high of $1.4 trillion in the first quarter of 2019, Experian claims. Considering that this is an increase of 116 percent in the last decade, it’s safe to say that young adults are starting their lives with a crushing debt burden. But student loans aren’t the only reason they are struggling: auto loans and credit cards are also hurting their pocketbook.
When compared to other generations, millennials are much less likely to have credit card debt. However, that doesn’t mean they are completely immune to it. As a matter of fact, most of the debt millennials between the ages of 25 and 34 carry comes from credit card use.
According to WalletHub’s latest Credit Card Debt Study, Americans of all ages repaid $38.2 billion in credit card debt during the year’s first quarter, making this the fourth-largest quarterly payoff ever. But despite this large sum, WalletHub estimates that consumer credit card debt will increase $70 billion for 2019 alone. Considering that Americans now owe more than $1 trillion, millennials are in as much trouble as their older counterparts. And as experience shows us, it is precisely as we age that we start to rely more on credit cards. Will millennials act differently?
To WalletHub CEO Odysseas Papadimitriou, current trends seem to indicate that they won’t.
When talking about how little of their debt Americans paid in the first quarter of 2019, Papadimitriou said that the fact that Americans are paying back less of what they owe proves that “consumers aren’t quite as healthy as some other metrics may indicate.”
With “the average household currently [owing] roughly $8,390,” he added, and the first-quarter paydown being so small, it might not be far-fetched to expect millennials to lose some of their net worth over time thanks to credit card debt.
Government and Personal Responsibility
The fact that the government created the current student-loan crisis is a well-established truth at this point. However, what few people talk about is how credit card debt can also be traced back to government’s bad monetary policies.
Credit card companies offer cards with high-interest rates because consumers who rely on credit cards are more likely to default. In order to make sure they can cover their costs and make some profit, these companies attach high-interest rates to their products, even when competing with other companies to appeal to a greater audience.
But the fact that so many people rely on credit cards for basic purchases and even to pay bills says something else about the country’s economy: the dollar’s purchasing power hasn’t kept up with inflation.
After the 2007 financial crisis, the Federal Reserve’s go-to policy was keeping interest rates low and expand its balance sheet, effectively creating a greater reserve of U.S. currency and putting more paper money into circulation.
While those who put their hands on this money first, such as Wall Street junkies, do make a profit, everyone else loses in the long run as the government’s policy of expanding the money supply and artificially inflating the prices of resources, as a result, devalues the currency. If living life wasn’t as expensive as it is now thanks to the country’s misguided monetary policies, then perhaps Americans wouldn’t rely on credit cards as much.
It is true that consumers would also be less likely to rely on a credit card, to begin with, if they understood what it meant to their finances in the long run. Unfortunately, they lack basic financial literacy and often see credit cards as a part of life.
In the end, both ignorance regarding their financial decisions and the government’s misguided policies are creating a ticking time bomb. (source, source)
I reported that Americans are using credit cards now in large numbers to pay for basic expenses. This is not the sign of a healthy economy at all.
As I have warned repeatedly and I will say again, people need to start thinking about the current year as similar to 2003. Things are not improving, and it is very likely that come 2023 or 2024, as the Presidential election dog-and-pony excuse for a show come around, there will be economic troubles as it will be used in order to justify various political policies. In the meantime, and definitely it is likely so if Trump is re-elected, the economy will be stable, not because it actually will improve, but because of political manipulation.
Stop paying attention to the dog and pony show and start paying attention to what is happening in society.
Work extra jobs. Save money. Put hard effort in now because when the next recession comes, and the likelihood of this in the next five years is very high, people are going to be economically devastated.
Men of good will and sound mind must prepare to help those around us- family, friends, neighbor, and stranger -for the sake of what is right and good because many will be caught by surprise.
It is true that one should not “lay up treasures on Earth”, but at the same time, it is often the “earthly treasures” that one can use to help people acquire Heavenly treasure by intelligent spending and monetary distribution at the correct times, and being done for the love of God and neighbor.
Remember the parable of the ant and the grasshopper. The ant did not store up food to say “let us eat and get fat and party,” but that winter was coming and that he should survive and help his fellow ants. The grasshopper did not do like, and he miserably perished.
Be forewarned from this story.