FEB 13, 2018
$13.15T just doesn't seem as serious, somehow, as when you see it written out in full. US households owe $13,150,000,000,000. And why not? The Fed has made sure that borrowing cost nearly nothing for almost a decade now. Free credit for everyone. But what do you think will happen to delinquency rates when interest rates finally and inevitably rise?
If you think you deserve something, you should have it. It’s the American way. And nobody should let a quibbling little detail like not having the money to pay for it stop them.
American households’ outstanding debt climbed to an all-time high of US$13.1 trillion in the October-December period, according to data released Tuesday by the Federal Reserve Bank of New York. It marked the fourth straight quarter in which borrowing reached a record.
It’s yet another example of how the economy’s vaunted growth and the stock markets endless melt-up are simple manifestations of money yet to be earned already being spent.
Debt balances increased from the previous quarter in all but one category, including a 3.2 percent gain in credit-card borrowing that was the second-largest since 2007 and a record level of auto loans. At the same time, 7.55 percent of credit-card balances were in serious delinquency -- those 90 days or more past due -- the highest since the first quarter of 2016, while the 4.05 percent delinquent share of car loans was the biggest since 2012.