https://sputnikglobe.com/20230809/bidenomics-in-action-americans-credit-card-debt-tops-record-1-trillion-1112479609.html
Bidenomics in Action: Americans’ Credit Card Debt Tops Record $1 Trillion
Bidenomics in Action: Americans’ Credit Card Debt Tops Record $1 Trillion
Sputnik International
For the first time in history, American credit card users owe more than $1 trillion in debt, according to the Federal Reserve Bank of New York.
2023-08-09T13:05+0000
2023-08-09T13:05+0000
2023-08-09T16:33+0000
us
joe biden
inflation
us economy
credit cards
us federal reserve bank
americas
federal reserve
bank of america
economic recession
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For the first time in history, American credit card users owe more than $1 trillion in debt, according to the Federal Reserve Bank of New York.There was an abundance of figures in the Quarterly Report on Household Debt and Credit released by the Federal Reserve Bank of New York’s Center for Microeconomic Data on Monday. But the gist of it was that for all the rosy prospects laid out by President Joe Biden in his ‘Bidenomics’, Americans are feeling the pinch on their wallets, with pricier goods forcing them to increasingly turn to credit to purchase essential items.The blunt figures, based on based on data from the New York Fed’s Consumer Credit Panel, point to a surge in credit card balances in the second quarter of 2023 by $45 billion (nearly 4.6%) to reach $1.03 trillion. This, coupled with auto loan balances, had driven total household debt up by by $16 billion (0.1%) to stand at $17.06 trillion. The report specified that:As far as housing debt was concerned, $393 billion in newly originated mortgage debt was registered in Q2 2023. Furthermore, close to 39,000 individuals had new foreclosure notations on their credit reports.Overall, credit card accounts had expanded over the above-cited time span by 5.48 million to reach 578.35 million. In simple terms, this means that there are approximately 2 credit cards for every adult across the nation. Average rates for auto and credit card delinquencies - amount of debt that is past due – is also the highest since the first quarter of 2018 and the first quarter of 2012, according to the New York Fed data.While the Federal Reserve report portrayed the record credit debt number as mere “brisk growth,” conceding that there was an increase in the number of individuals that failed to make payments, the milestone, in itself, mirrors how far the US President’s "Bidenomics" accolades are detached from reality.Fed's Rate Hikes Hit ConsumersThe data comes against the backdrop of interest rates that have been jacked up by the Federal Reserve to a 22-year high in a bid to fight persistently high inflation.Interest rates have been “feeding” through from the Fed’s rate to interest rates on mortgages and credit cards, economists have told US media, which explains how everyday consumers are affected.Currently, an average credit card charges a 20.53 percent interest rate, as per Bankrate.A further sign of financial distress experienced by people in the US is the fact that they are increasingly pulling money out of their 401(k) plans. Bank of America reported on Tuesday that Americans were dipping into the employer-sponsored retirement savings plan that offers tax benefits. The number of people who made such a withdrawal during the second quarter had increased by 36 percent from the second quarter of 2022.With federal student loan payments to resume in October after the close to three-year pause triggered by the COVID-19 pandemic, analysts are warning that people’s budgets are going to be pretty tight. Inevitably, Americans will rein in their spending, the Morning Consult economist added.'Bidenomics': Record of Failure"Bidenomics" is a term perceived as a repudiation of the Ronald Reagan-era trickle down "Reaganomics" policies in the 1980s. The punchline is that no matter how much Biden touts this economic policy agenda of his, the term (albeit purportedly not coined by him) is viewed by critics as a pejorative. During his trip to Philadelphia on July 20, 2023, the 80-year-old Democrat who seeks another bout for the White House claimed his team's priority is to "strengthen the middle class." Biden claimed the US had "the highest economic growth among the world’s leading economies since the pandemic" and that his government had created 13 million new jobs, despite inflation soaring and recession looming as a result of its sanctions on Russia, and vast military aid to fuel the proxy war against Russia in Ukraine. Furthermore, sanctions against Russia since 2022 have backfired, while failing to cripple the Russian economy as intended.Economic pundits have told Sputnik that the US president's "Bidenomics" plan is a "war on the poor" that only helps the wealthy. They underscored that America's economic growth was slow and bleak, and food inflation is up 5.7 percent from a year ago. When it comes to the US gross domestic product (GDP), last year it grew only 1 percent, December to December, as per economists. In addition, the US national debt has grown to $34 trillion and higher. Joe Biden's spending spree has helped drive prices up by more than 16 percent in the months since he took office, as per US reports, rendering many goods and services unaffordable for families. Small wonder that polls show that 60 percent of Americans believe the nation is on the "wrong track," and that Biden himself is "unfit" for office.
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american credit card users, $1 trillion in debt, federal reserve bank of new york, bidenomics, failed bidenomics, looming recession, inflation
american credit card users, $1 trillion in debt, federal reserve bank of new york, bidenomics, failed bidenomics, looming recession, inflation
Bidenomics in Action: Americans’ Credit Card Debt Tops Record $1 Trillion
13:05 GMT 09.08.2023 (Updated: 16:33 GMT 09.08.2023) US President Joe Biden might have touted his "Bidenomics" policies during his Philadelphia visit on July 20, 2023, claiming that "to strengthen the middle class" was his administration’s priority, but figures and facts are a great deal more sobering, as recent data from the US central bank shows.
For the first time in history, American credit card users owe more than $1 trillion in debt,
according to the Federal Reserve Bank of New York.
There was an abundance of figures in the
Quarterly Report on Household Debt and Credit released by the Federal Reserve Bank of New York’s Center for Microeconomic Data on Monday. But the gist of it was that for all the rosy prospects laid out by President Joe Biden in his
‘Bidenomics’, Americans are feeling the pinch on their wallets, with pricier goods forcing them to increasingly
turn to credit to purchase essential items.The blunt figures, based on based on data from the New York Fed’s Consumer Credit Panel, point to a surge in credit card balances in the second quarter of 2023 by $45 billion (nearly 4.6%) to reach $1.03 trillion. This, coupled with auto loan balances, had driven total household debt up by by $16 billion (0.1%) to stand at $17.06 trillion.
The report specified that:
Mortgage balances stood at $12.01 trillion at the end of June
Mortgage originations & refinances stood at $393 billion (a $70 billion hike up from the first quarter)
Auto loan balances followed an upward trajectory by $20 billion
Other balances, including retail cards & other consumer loans, grew by $15 billion.
As far as housing debt was concerned, $393 billion in newly originated mortgage debt was registered in Q2 2023. Furthermore, close to 39,000 individuals had new foreclosure notations on their credit reports.
Overall, credit card accounts had expanded over the above-cited time span by 5.48 million to reach 578.35 million. In simple terms, this means that there are approximately 2 credit cards for every adult across the nation. Average rates for auto and credit card delinquencies - amount of debt that is past due – is also the highest since the first quarter of 2018 and the first quarter of 2012, according to the New York Fed data.
While the Federal Reserve report portrayed the record credit debt number as mere “brisk growth,” conceding that there was an increase in the number of individuals that failed to make payments, the milestone, in itself, mirrors how far the US President’s "Bidenomics" accolades are detached from reality.
Fed's Rate Hikes Hit Consumers
The data comes against the backdrop of interest rates that have been jacked up by the Federal Reserve to a 22-year high in a bid
to fight persistently high inflation.
The Fed has identified runaway jobs growth and correspondingly higher wages - as well as trillions of dollars of relief spending over the 2020 coronavirus outbreak - as among reasons for inflation hitting 40-year highs of more than 9% a year in June 2022. Since March 2022, the Fed has hiked rates by 525 basis points from a previous 25. Its next decision on interest rates is on September 20.
Interest rates have been “feeding” through from the Fed’s rate to interest rates on mortgages and credit cards, economists have told US media, which explains how everyday consumers are affected.
“…With elevated interest rates, paying that debt becomes more expensive, and with consumers continuing to take on more debt, this combination will put more pressure on some households who have those tighter budgets,” economist Sofia Baig, was cited as saying.
Currently, an average credit card charges a 20.53 percent interest rate, as per Bankrate.
A further sign of financial distress experienced by people in the US is the fact that they are increasingly pulling money out of their 401(k) plans. Bank of America reported on Tuesday that Americans were dipping into the employer-sponsored retirement savings plan that offers tax benefits. The number of people who made such a withdrawal during the second quarter had increased by 36 percent from the second quarter of 2022.
With federal
student loan payments to resume in October after the close to three-year pause triggered by the COVID-19 pandemic, analysts are warning that people’s budgets are going to be pretty tight. Inevitably, Americans will rein in their spending, the
Morning Consult economist added.
'Bidenomics': Record of Failure
"Bidenomics" is a term perceived as a repudiation of the Ronald Reagan-era trickle down "Reaganomics" policies in the 1980s. The punchline is that no matter how much Biden touts this economic policy agenda of his, the term (albeit purportedly not coined by him) is viewed by critics as a pejorative.
During his trip to Philadelphia on July 20, 2023, the 80-year-old Democrat who seeks another bout for the White House claimed his team's priority is to "
strengthen the middle class." Biden claimed the US had "
the highest economic growth among the world’s leading economies since the pandemic" and that his government had created 13 million new jobs, despite
inflation soaring and
recession looming as a result of its sanctions on Russia, and vast military aid to fuel the proxy war against Russia in Ukraine. Furthermore, sanctions against Russia since 2022 have backfired, while failing to cripple the Russian economy as intended.
Economic pundits
have told Sputnik that the US president's "Bidenomics" plan is a "war on the poor" that only helps the wealthy. They underscored that America's economic growth was slow and bleak, and food inflation is up 5.7 percent from a year ago. When it comes to the US gross domestic product (GDP), last year it grew only 1 percent, December to December, as per economists. In addition, the US national debt has grown to
$34 trillion and higher. Joe Biden's spending spree has helped drive prices up by more than 16 percent in the months since he took office, as per US reports, rendering many goods and services unaffordable for families.
Small wonder that polls show that 60 percent of Americans believe the nation is on the "wrong track," and that Biden himself is "unfit" for office.
8 January 2023, 15:01 GMT
