Junious Ricardo Stanton
“Credit cards are a key element in the banking industry’s profits. At commercial banks, the average interest rate on credit-card plans is 15.1% and the average assessed interest rate is 16.9%, on $1 trillion in outstanding credit balances. This amounts to around $150 billion to $169 billion a year in interest income! These banks rely on consumers to spend money they don’t have.” The State of American Debt Slaves Q1 2019 Wolf
Richter https://wolfstreet.com/2019/05/08/the-state-of-the-american-debt-slaves-q1-2019/
When Trump and the corporate media tell you the economy was booming and unemployment was at record lows, before COVID 19 hit, don’t believe the hype, it is disinformation! The corporate media rarely mentions the fact the US economy is propped up by massive debt: consumer debt, corporate debt, government debts, trade deficits and plain ol’ corruption. The US economy was imploding due to poor fiscal management: tax cuts for the rich, trade wars with the EU, Canada, Mexico and China, increased government spending, unwise tariffs and the Federal Reserve’s policies of Qualitative Easing, zero interests rates and now the CARES ACT boondoggle to the big banks, hedge funds and big businesses. Meanwhile the working and middle class continue to experience stagflation; stagnant wages and rising costs caused by the rise in the money supply.
The fact is most of the US gross domestic product is fueled by debt. This means the goods and services produced in the US are driven by debt: loans to the businesses for operations, production, equipment, expansion and maintenance, loans to consumers in the form of car loans, credit cards, student loans, mortgages, Home Equity Lines of Credit (HELOC), other purchases and of course government debt. US manufacturing has been offshored and it is highly unlikely it will come back. Sadly locking down the economy is not going to help at all!
In the US, human beings are called consumers by the powers that be; probably because we overly consume resources, because our spending consumes us, shrinks our wealth and savings potential and puts us at the mercy of the lenders and economic circumstances like interest rates, liquidity (availability of cash and credit).
“Consumer debt is what you owe, as opposed to what a business or the government owes. It's also called consumer credit. It can be borrowed from a bank, a credit union, and the federal government. There are two types of consumer debt: credit cards (revolving) and fixed-payment loans (non-revolving). Credit card debt is called revolving because it's meant to be paid off each month. They incur variable interest rates that are pegged to Libor. Non- revolving debt isn't paid off each month. Instead, these loans are usually held for the life of the underlying asset. Borrowers can choose between loans with either fixed interest rates or variable rates. Most non-revolving debt is auto loans or school loans. Although home mortgages are also an enormous loan, they aren't a type of consumer debt. Instead, they are personal investments in residential real estate... In March 2019 U.S. consumer debt rose 3.1% to $4.052 trillion. That surpassed last month's record of $4.042 trillion. Of this, $2.995 trillion was non-revolving debt, and it rose 5.0%. Most non-revolving debt is education and auto loans. In March 2019, school debt totaled $1.598 trillion and auto loans were $1.161 trillion. Credit card debt totaled $1.057 trillion, decreasing 2.5%. It exceeds the record of $1.02 trillion set in 2008. But credit card debt is only 26% of total debt. It was 38% of total debt in
Read more Junious Stanton view ScoopUSA Media May 26, 2020 page 6