We just got another extremely disappointing GDP number. It was being projected that U.S. GDP would grow by 2.5 percent during the second quarter of 2016, but instead it only grew by just 1.2 percent. In addition, the Census Bureau announced that GDP growth for the first quarter of 2016 had been revised down from 1.1 percent to 0.8 percent. What this means is that the U.S. economy is just barely hanging on by its fingernails from falling into a recession. As Zero Hedge has pointed out, the “average annual growth rate during the current business cycle remains the weakest of any expansion since at least 1949″. This is not what a recovery looks like.
In addition, Barack Obama remains solidly on track to be the only president in all of U.S. history to never have a single year when the economy grew by at least 3 percent. Every other president in American history, even the really bad ones, had at least one year when U.S. GDP grew by at least 3 percent. But this has not happened under Obama even though he has had two terms in the White House.
The following are the yearly GDP growth numbers under Obama. They come directly from the official website of the World Bank…
2009: -2.8 percent
2010: 2.5 percent
2011: 1.6 percent
2012: 2.2 percent
2013: 1.5 percent
2014: 2.4 percent
2015: 2.4 percent
Does that look like a “recovery” to you?
Of course not.
And many are anticipating that this latest extremely disappointing GDP number will discourage the Federal Reserve from raising interest rates any time in the near future…
The disappointing report could keep the Federal Reserve on hold longer as it considers another interest rate hike. The Fed lifted its key rate in December for the first time in nine years but has held it steady since.
According to the pundits in the mainstream media, this was supposed to be the year when the U.S. economy finally returned to “normal”, but that has not happened at all. In fact, in recent days we have gotten a spate of bad news about the economy. We just learned that the homeownership rate in the United States has hit the lowest level ever, and Gallup’s U.S. economic confidence index has fallen to the lowest level so far this year.
With the election coming up rapidly, this is the kind of news that Hillary Clinton definitely does not need. She needs to be able to sell the American people on the idea that the Obama years have been very good for the U.S. economy. If things take a sharp turn down in the coming months, that may be enough to cost her the election.
So far, Hillary Clinton’s economic agenda has not received that much scrutiny, but the truth is that she hopes to increase taxes in a whole bunch of ways which would be very harmful for the economy. The following comes from an excellent piece by John Kartch and Alexander Hendrie…
Hillary has endorsed several tax increases on middle income Americans, despite her pledge not to raise taxes on any American making less than $250,000. She has said she would be fine with a payroll tax hike on all Americans, she has endorsed a steep soda tax, endorsed a 25% national gun tax, and most recently, her campaign manager John Podesta said she would be open to a carbon tax. It’s no wonder that when asked by ABC’s George Stephanopoulos if her pledge was a “rock-solid” promise, she slipped and said the pledge was merely a “goal.” In other words, she’s going to raise taxes on middle income Americans.
Hillary’s formally proposed $1 trillion net tax increase consists of the following:
Income Tax Increase – $350 Billion: Clinton has proposed a $350 billion income tax hike in the form of a 28 percent cap on itemized deductions.
Business Tax Increase — $275 Billion: Clinton has called for a tax hike of at least $275 billion through undefined business tax reform, as described in a Clinton campaign document.
“Fairness” Tax Increase — $400 Billion: According to her published plan, Clinton has called for a tax increase of “between $400 and $500 billion” by “restoring basic fairness to our tax code.” These proposals include a “fair share surcharge,” the taxing of carried interest capital gains as ordinary income, and a hike in the Death Tax.
Taxes tend to be a pet peeve of mine, so looking at that list of proposed taxes definitely makes me cringe.
If Donald Trump wants to hit the Democrats really hard on the economy, all he has to do is point out the fact that Barack Obama is going to be the only president in American history to never see 3 percent economic growth for an entire year, and he had two entire terms in which to try to turn things in a positive direction.
Sadly, things are very likely going to be worse for the economy no matter who wins the election. Under Obama, our national debt, our trade deficit, and most of our other long-term economic problems have gotten much, much worse, and so the table is set for a major economic disaster during the next presidential administration.
And if what I have to share about the future of America in my new book is correct, we are definitely moving into a “perfect storm” that will not just be economic in nature. The things that are coming are going to shake this nation to the very core, and I believe that we will soon face the consequences for decades of exceedingly foolish decisions.
So in the end, we may look back and long for the days of 1.2 percent economic growth, because what is on the horizon is going to make that look like a Sunday picnic.
If we are not heading into a recession, why does our economy continue to act as if that is precisely what is happening? As you will see below, we learned this week that factory orders have declined year over year for six months in a row. That is something that has never happened outside of a time of recession. We have also seen new orders for consumer goods fall dramatically. In fact, the only time we have seen a more dramatic decline in that number was during the last recession. And when you add these two items to what I have written about previously, the overall economic picture becomes even more disturbing. Corporate profits have fallen for two quarters in a row, our exports fell by 7.6 percent during the first quarter of 2015, and U.S. GDP contracted by 0.7 percent during Q1. Even though Barack Obama and the mainstream media are willingly ignoring them, the truth is that these numbers are absolutely screaming that we are going into a new recession.
Sometimes, a picture is worth more than a thousand words, and I believe that is certainly the case with the chart that I have posted below. It comes from Zero Hedge, and it shows that factory orders have declined year over year for six months in a row. The only times when this has ever happened before have been when the U.S. economy has been in recession…
When we look at new orders for consumer goods, we see a similar thing happening. This next chart comes from Charles Hugh Smith, and it really doesn’t need much explanation…
Here is another chart from Charles Hugh Smith. This one shows the percentage change in new orders for consumer goods on a year over year basis…
These charts that I just shared with you are rather compelling. How anyone can see them and still believe that we are in an “economic recovery” is beyond me.
When the economy starts to turn, there are certain things that we look for. As I have written about over and over on my website, so many of the exact same patterns that we have seen emerge just prior to previous economic downturns are happening again right now.
Yes, the stock market is still sitting pretty for the moment. But almost everyone can see that it is massively overvalued and could start tanking at any time. And when the market does start crashing it is just going to cause our economic problems to accelerate even more.
Sadly, most Americans are totally oblivious to all of this.
Most Americans just continue to do the same things that they have always done. That includes going into ridiculous amounts of debt. For instance, this week we learned that the percentage of auto loans that are being stretched out for periods of greater than 6 years is at an all-time high…
The average new car loan has reached a record 67 months, reports Experian, the Ireland-based information-services company. The percentage of loans with terms of 73 to 84 months also reached a new high of 29.5% in the first quarter of 2015, up from 24.9% a year earlier.
Long-term used-vehicle loans also broke records with loan terms of 73 to 84 months reaching 16% in the first quarter 2015, up from 12.94% — also the highest on record.
But you know what?
Even though most Americans are being exceedingly foolish and are living paycheck to paycheck, that still isn’t good enough for the boys and girls on Wall Street.
Just consider the following excerpt from a recent Wall Street Journal piece entitled “A Letter To Stingy American Consumers”…
Do you know the American economy is counting on you? We can’t count on the rest of the world to spend money on our stuff. The rest of the world is in an even worse mood than you are. You should feel lucky you’re not a Greek consumer. And China, well they’re truly struggling there just to reach the very modest goal of 7% growth.
The Federal Reserve is counting on you too. Fed officials want to start raising the cost of your borrowing because they worry they’ve been giving you a free ride for too long with zero interest rates. We listen to Fed officials all of the time here at The Wall Street Journal, and they just can’t figure you out.
Please let us know the problem. You can reach us at any of the emails below.
The Wall Street Journal’s Central Bank Team
-By Jon Hilsenrath
They just want all of us to keep borrowing and spending our way into oblivion. But of course when things do fall apart and millions of Americans can’t pay their debts, they will be there to foreclose on our homes and repossess our vehicles without any hesitation.
And when the next major economic downturn does strike, don’t expect the rest of the planet to feel sorry for us. We like to think that the rest of the world looks up to us, but the exact opposite is actually true. At this point, much of the globe is pointing fingers at us and mocking us. Just consider the following excerpt from an article that appeared in Pravda…
The land of illusion; the land of entertainment producing songs and movies to warp reality. People pretending to be something they are not. Likewise, Washington DC has people who pretend to represent the people’s interests. Pretending to bring hope and a change for the better. Pretending to bring unity and peace among all races. Lying through their teeth and laughing like clowns behind closed doors. Setting up a consumer based economy forcing the once mighty middle class to shrink and work at customer service jobs. “Ya want fries with that?“
It would be easy to dismiss that paragraph as “Russian propaganda”, but the cold, hard reality of the matter is that there is nothing in that quote that is not true.
They are mocking us, and they are dead on. We are the land of illusion. We do have a shrinking middle class. And we are definitely addicted to entertainment. If you doubt this, just check out what one study recently found…
If you weren’t reading this article, you would probably be scanning something else on the internet, watching TV, or maybe—just maybe—reading a newspaper or magazine. In short, you would be consuming media.
On average, people spend more than 490 minutes of their day with some sort of media, according to a new report by ZenithOptimedia. Television remains dominant, accounting for three hours of daily consumption—an hour more than the internet, in second place.
Other studies have actually discovered that the amount of time that Americans spend connected to media is even greater. This is something that I discussed in a previous article entitled “How Much Time Do Americans Spend Plugged Into The Matrix Every Day?”
For the moment, the mainstream media is assuring everyone that everything is going to be just fine and that they should go out and spend lots and lots of money.
But instead of spending your money on frivolous things like boats, electronic toys and expensive vacations, I believe that now is the time to get prepared for the great economic crisis which is currently starting to unfold.
Right now, I know that most people don’t actually believe that life in America is about to dramatically change.
So many of the things that people (including myself) have been warning about for so long are about to happen. Our politicians and national leaders have turned a deaf ear to all of the warnings and have continued to conduct business as usual. Soon, the error of their ways will be apparent to all.
We are heading into the greatest economic crisis in U.S. history, and there is going to be no coming back to the false, debt-fueled “prosperity” that we are enjoying today.
On Friday, the federal government announced that the U.S. economy contracted at a 0.7 percent annual rate during the first quarter of 2015. This unexpected shrinking of the economy is being primarily blamed on “harsh” weather during the first three months of this year and on the strengthening of the U.S. dollar. Most economists are confident that U.S. GDP will rebound back into positive territory when the numbers for the second quarter come out, but if that does not happen we will officially meet the government’s criteria for being in another “recession”. To make sure that the numbers for Q2 will look “acceptable”, the Bureau of Economic Analysis is about to change the way that it calculates GDP again. They are just going to keep “seasonally adjusting” the numbers until they get what they want. At this point, the government numbers are so full of “assumptions” and “estimates” that they don’t really bear much resemblance to reality anyway. In fact, John Williams of shadowstats.com has calculated that if the government was actually using honest numbers that they would show that we have continually been in a recession since 2005. That is why I am referring to this as a “recession within a recession”. Most people can look around and see that economic conditions for most Americans are not good, and now they are about to get even worse.
For quite a while I have been warning that another economic downturn was coming. Well, now we have official confirmation from the Obama administration that it is happening. The following is an excerpt from the statement that the Bureau of Economic Analysis released on Friday…
Real gross domestic product — the value of the production of goods and services in the United
States, adjusted for price changes — decreased at an annual rate of 0.7 percent in the first quarter of
2015, according to the “second” estimate released by the Bureau of Economic Analysis. In the fourth
quarter, real GDP increased 2.2 percent.
The GDP estimate released today is based on more complete source data than were available for
the “advance” estimate issued last month. In the advance estimate, real GDP increased 0.2 percent.
With the second estimate for the first quarter, imports increased more and private inventory investment
increased less than previously estimated (for more information, see “Revisions” on page 3).
The decrease in real GDP in the first quarter primarily reflected negative contributions from
exports, nonresidential fixed investment, and state and local government spending that were partly offset by positive contributions from personal consumption expenditures (PCE), private inventory investment, and residential fixed investment.
And actually, Q1 GDP would have been far worse if not for a very large inventory buildup. Without that inventory buildup, Q1 GDP would have been in the neighborhood of negative three percent according to Zero Hedge. Despite the happy face that most analysts are putting on these numbers, the truth is that they reveal some deeply troubling trends.
One of the things that is driving this current downturn is the fact that our trade balance continues to get even worse. In other words, the gap between how much we buy from the rest of the world and how much we sell to the rest of the world is growing.
During the first quarter, imports surged by 5.6 percent. That means that we are buying more from the rest of the planet than we did before.
Unfortunately, during the first quarter of this year exports dropped by a staggering 7.6 percent. That means that the amount of stuff that we are selling to the rest of the planet is falling precipitously.
When our trade deficit expands, we lose jobs, businesses and economic infrastructure at an even faster pace. This is why I write about trade issues so much. Our economy is being absolutely eviscerated, and the Obama administration is pushing another giant trade deal which will greatly accelerate this process.
We are committing national economic suicide by running colossal trade deficits year after year. But instead of addressing our problems, our “leaders” just continue to conduct business as usual.
And to make themselves look good, they just keep manipulating the numbers until they seem “reasonable”. As I mentioned above, the negative number for Q1 is causing a lot of consternation in Washington, so now the Bureau of Economic Analysis is going to modify the way that GDP is calculated once again. The following comes from Bloomberg…
The way some parts of U.S. gross domestic product are calculated are about to change in the wake of the debate over persistently depressed first-quarter growth.
In a blog post published Friday, the Bureau of Economic Analysis listed a series of alterations it will make in seasonally adjusting data used to calculate economic growth. The changes will be implemented with the release of the initial second-quarter GDP estimate on July 30, the BEA said.
Although the agency adjusts its figures for seasonal variations, growth in any given first quarter still tends to be weaker than in the remaining three, economists have found, a sign there may be some bias in the data. It’s a phenomenon economists call “residual seasonality.”
Why can’t they just give us honest numbers?
Meanwhile, we also learned on Friday that corporate profits declined again during the first quarter of 2015. This was the second quarter in a row that we have seen this happen. The following comes from CNS News…
The BEA report also released data on corporate profits, which showed a decrease from the previous quarter. ‘Profits from current production decreased $125.5 billion in the first quarter, compared with a decrease of $30.4 billion in the fourth,’ BEA said.
Can you guess the last time that corporate profits declined for two quarters in a row?
It was in 2008.
So many of the exact same red flags that popped up seven years ago are popping up once again.
I know that I must sound like a broken record, but right now there are more signals that another major economic downturn is approaching than there has been at any other time since I started The Economic Collapse Blog in 2009.
Hopefully this summer will be relatively quiet, but I fully expect for events to start accelerating significantly during the second half of this year.
So if you have things that you need to get done before the next crisis arrives, you better hurry up, because time is quickly running out.
During the first three months of this year, the U.S. economy contracted at a 1 percent annual rate. Despite this, mainstream economists flooded the mainstream media with assurances that much better days are just around the corner on Thursday. In fact, many of them boldly predicted that U.S. GDP would grow at a 3 or 4 percent annual rate in the second quarter. None of them seem the least bit concerned that another major recession is rapidly approaching. Instead, they just blamed the bad number for the first quarter on a “severe winter“, and the financial markets responded to the GDP news quite cheerfully. In fact, the S&P 500 soared to another brand new record high. No matter how bad the numbers get, almost everyone in the financial world seems quite optimistic. But is there actually good reason to have such optimism?
As Zero Hedge has pointed out, if it wasn’t for dramatically increased healthcare spending due to the implementation of Obamacare, U.S. GDP would have actually dropped at a 2 percent annual rate during the first quarter of 2014.
That would have been an absolutely disastrous number.
But within a very short time of the revised U.S. GDP number being released, the mainstream media was inundated with positive stories about the news.
For example, CNN published a story entitled “U.S. economy shrinks, but it’s not a big deal” and CNBC released a survey of nine prominent economists that showed that their consensus forecast for the second quarter of 2014 is GDP growth at a 3.74 percent annual rate.
It just seems like almost everyone wants to forget about what happened during the first quarter and wants to look ahead to a great number for quarter two.
Joseph Lavorgna, the chief U.S. economist at Deutsche Bank, is boldly forecasting a 4 percent growth rate for the second quarter. So is Jim O’Sullivan. In fact, it is hard to find any “expert” in the mainstream media that does not expect rip-roaring economic growth this quarter.
For example, just check out these quotes…
–Stuart Hoffman, the chief economist for PNC Bank: “The first quarter was disappointing, but rather than view that as an omen of a recession or the first of a down leg in the economy, I see the seeds of a big bounce back in spring.”
–Paul Ashworth of Capital Economics: “For those worried about a recession, it’s worth remembering that employment increased by nearly 300,000 in April.”
–The Bank of Tokyo’s Chris Rupkey: “2Q growth seen at nearly 4%… Weak 1Q is stone cold dead as an indicator of where the economy is headed.”
–Jan Hatzius of Goldman Sachs: “Because of weaker inventory investment in Q1, we increased our Q2 GDP tracking estimate by two-tenths to 3.9%.”
–Dun & Bradstreet Credibility Corp. CEO Jeffrey Stibel: “Using an alternative model for projecting job growth, we see an entirely different scenario, one in which the U.S. unemployment rate will fall below 5 percent by no later than the middle of next year.”
Hopefully they are right.
Hopefully we are not heading into another recession.
But as I discussed in an article earlier this week, evidence continues to mount that another recession has already begun for much of the country.
And there was another number that was released today that seems to confirm this. According to CNBC, there was a 6 percent drop in exports in the first quarter of 2014 when compared to the first quarter of 2013…
The U.S. economic reversal was led by a 6 percent drop in exports year over year, until recently hailed as a key driver of the U.S. recovery, and which had risen 9.5 percent in the last three months of 2013.
The slackening of trade has spread to the developing world, where emerging economies are seeing less demand from the U.S., Europe and China for raw materials and other exports.
We saw a similar decline happen in mid-2008 as the U.S. economy plunged into recession.
And Bloomberg’s Consumer Comfort index has fallen to the lowest level that we have seen in six months. U.S. consumers are increasingly tapped out, and the ongoing “retail apocalypse” is evidence of that fact.
A declining middle class simply cannot support the massive retail infrastructure that America has developed. As the middle class has fallen to pieces, it was just a matter of time before big trouble started erupting for the retail industry. This is something that David Stockman recently wrote about…
It does not take much analysis to see that these bell ringers do not represent sustainable prosperity unfolding across the land. For example, around 1990 real median income was $56k per household and now, 25 years later, its just $51k—-meaning that main street living standards have plunged by about 9% during the last quarter century. But what has not dropped is the opportunity for Americans to drop shopping: square footage per capita during the same period more than doubled, rising from 19 square feet per capita at the earlier date to 47 at present.
This complete contradiction—declining real living standards and soaring investment in retail space—did not occur due to some embedded irrational impulse in America to speculate in real estate, or because capitalism has an inherent tendency to go off the deep-end. The fact that in equally “prosperous” Germany today there is only 12 square feet of retail space per capita is an obvious tip-off, and this is not a teutonic aberration. America’s prize-winning number of 47 square feet of retail space per capita is 3-8X higher than anywhere else in the developed world!
Without middle class jobs, you can’t have a middle class. That is why our employment crisis is at the very heart of our economic problems. Even using the government’s highly manipulated unemployment figures, there are still quite a few cities out there that have official unemployment rates in the double digits…
The unemployment rate in Yuma, Ariz., is 23.8%. In El Centro, Calif., it is 21.6%. El Centro sits in an area of California in which unemployment in many metro areas is double the national average. In Merced the figure is 14.3%, in Yuba City the figure is 14.5%, in Hanford it is 13.1% and in Visalia it is 13.4%. In several metros close to these, the figure is above 10%. Most of them are inland from San Francisco and the area just south of it, which also happens to be among the nation’s most drought-plagued regions. This means jobs recovery is highly unlikely.
But of course the truth is that if the government actually used honest numbers, the unemployment rate for the entire nation would be in double digits.
And as I like to remind people, according to the government’s own numbers approximately 20 percent of the families in the entire nation do not have a single member that is employed.
So how is it possible that the “unemployment rate” is just a little above 6 percent?
It is a giant sham.
But that is what they want.
They want us feeling good and thinking that everything is going to be okay.
Unfortunately, they used the same approach back in 2007 and 2008, and we all remember how that turned out.
Anyone that thinks that the U.S. economy can keep going along like this is absolutely crazy. We are in the terminal phase of an unprecedented debt spiral which has allowed us to live far, far beyond our means for the last several decades. Unfortunately, all debt spirals eventually end, and they usually do so in a very disorderly manner. The chart that you are about to see is one of my favorite economic charts. It compares the growth of U.S. GDP to the growth of total debt in the United States. Yes, U.S. GDP has certainly grown at a decent pace over the years, but our total debt has absolutely exploded. 40 years ago, the total amount of debt in our system (government debt + corporate debt + consumer debt, etc.) was about 2 trillion dollars. Today it has grown to more than 56 trillion dollars. Our debt has grown at a much, much faster rate than our economy has, and there is no way in the world that we will be able to continue to do that for long.
Posted below is the chart that I was talking about. The blue line is our total debt, and the red line is our GDP. As you can see, this chart kind of speaks for itself…
So how did we get here?
Well, of course the federal government has been the biggest offender. It would be a tremendous understatement to say that the politicians in Washington D.C. have been reckless. Since the year 2000, the size of the U.S. national debt has grown by more than 11 trillion dollars.
Posted below is a chart that demonstrates the dramatic growth of the national debt as a percentage of GDP. In particular, our debt has absolutely exploded as a percentage of GDP since the financial crisis of 2008…
Does that look sustainable to you?
Of course it isn’t.
Right now, the mainstream media is very excited that the federal budget deficit for this year might be less than a trillion dollars, but they are really missing the point. The debt of the U.S. government is still growing much, much faster than the economy is, and the United States already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain.
What we are doing to future generations is absolutely criminal. We are piling up mountains of debt that will haunt them for the rest of their lives just so that we can make the present a little bit more pleasant for ourselves.
As I noted in another article, during Obama’s first term the federal government accumulated more debt than it did under the first 42 U.S presidents combined. And now we are entering a time period when demographic forces are going to put a tremendous amount of pressure on the finances of the federal government.
The Baby Boomers have started to retire, and they are going to want to start collecting on all of the financial promises that we have made to them.
As I have written about previously, the number of Americans on Medicare is projected to grow from a little bit more than 50 million today to 73.2 million in 2025.
The number of Americans collecting Social Security benefits is projected to grow from about 56 million today to 91 million in 2035.
Where are we going to get the money to pay for all of that?
Boston University economist Laurence Kotlikoff has calculated that the U.S. government is facing unfunded liabilities of 222 trillion dollars in the years ahead.
There is no simply no way that the U.S. government is going to be able to meet those obligations without wildly printing up money.
And of course the federal government is not the only one with massive debt problems. We just saw the city of Detroit go bankrupt, and there are lots of other communities all over the nation that could soon follow.
Posted below is a chart that shows the growth of state and local government debt over the years. In particular, please take note that the total amount of state and local government debt has grown from about 1.2 trillion dollars in the year 2000 to about 3 trillion dollars today…
But the chart posted above does not even take into account the massive unfunded pension obligations that state and local governments are facing. According to the Detroit Free Press, state governments are facing unfunded pension obligations of nearly a trillion and a half dollars…
From Baltimore to Los Angeles, and many points in between, municipalities are increasingly confronted with how to pay for these massive promises. The Pew Center for the States, in Washington, estimated states’ public pension plans across the U.S. were underfunded by a whopping $1.4 trillion in 2010.
And many large cities are dealing with similar situations. Detroit was the first to go down, but could Chicago or Los Angeles eventually be forced to declare bankruptcy too?…
Chicago recently saw its credit rating downgraded because of a $19-billion unfunded pension liability that the ratings service Moody’s puts closer to $36 billion. And Los Angeles could be facing a liability of more than $30 billion, by some estimates.
According to a report that was released earlier this year, the largest U.S. cities are facing hundreds of billions of dollars in unfunded pension liabilities at this point…
Early this year, the Pew Center released a survey showing that 61 of the nation’s largest cities — limiting the survey to the largest city in each state and all other cities with more than 500,000 people — had a gap of more than $217 billion in unfunded pension and health care liabilities. While cities had long promised health care, life insurance and other benefits to retirees, “few … started saving to cover the long-term costs,” the report said.
So where will all of that money come from?
That is a good question, and nobody has an easy answer at this point.
Meanwhile, U.S. consumers have been racking up staggering amounts of debt over the past several decades. Just consider the following numbers…
-Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.
-Car loans just keep getting longer and longer, and approximately 70 percent of all car purchases in the United States now involve an auto loan.
-The total amount of student loan debt in America recently surpassed the one trillion dollar mark.
-One study discovered that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt, and according to a report published in The American Journal of Medicine medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.
-Consumer debt in the United States has risen by a whopping 1700% since 1971, and 46% of all Americans carry a credit card balance from month to month.
Sadly, most people don’t realize how damaging credit card debt can be. If you just carry an “average balance” on your credit cards each month, and those credit cards have just an “average” interest rate, you could end up paying millions of dollars to the credit card companies by the end of your life…
Let’s say you are an average American household, and you carry an average balance of $15,956 in credit card debt.
Also, as an average American household, let’s assume you pay an average current rate of 12.83%.
Finally, let’s assume you carry this average balance for 40 years, between ages 25 and 65. How much did your credit card company make off of you and your extreme averageness?
Incredibly, a large percentage of the population does not seem to understand these things. An astounding 43 percent of all American families spend more than they earn each year.
Are you starting to understand why approximately half of all Americans die broke?
We are a nation that is completely and addicted to debt.
If you do not believe that it will ever catch up with us you are being delusional.
We have piled up the biggest mountain of debt in the history of the planet, and a day of reckoning is fast approaching.