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U.S. Consumer Debt Surpasses Financial Crisis Levels

Mac Slavo
June 24th, 2019
SHTFplan.com
Comments (24)

Debt levels reached record levels during the Great Recession which struck the United States about a decade ago. Now, U.S. consumer debt has surpassed those levels with a record number of Americans living on the edge of disaster.

According to Market Watch, Ben Mohr, a senior research analyst of fixed income at investment consultant Marquette Associates, calculated that total U.S. consumer debt hit $14 trillion in the first quarter of 2019, surpassing the roughly $13 trillion of leverage accumulated in credit cards, auto loans, and mortgages and other debt back in 2008, when those souring loans and securities pegged to them helped to send global markets into a tailspin.

It appears that Americans’ appetite for more will never cease. Mohr told MarketWatch that the increase in student loans (often cited as a source of consternation for economists and strategists) saw a notable spike. At the end of the first three months of 2019, student loan debt hit $1.486 trillion, according to credit data from the New York Federal Reserve. By comparison, student loan debt at the height of the financial crisis was $611 billion. It has been rising incredibly since Mohr said. “It has ballooned and that’s a dramatic increase,” the fixed-income analyst said of the student-debt expansion.

Mohr also highlighted the ratio of debt Americans now carry. He estimated the ratio of debt compared against the U.S. population (estimated at 327 million according to U.S. Census Bureau data) translates to a record per-person debt ratio at $41.77, surpassing the ratio of $41.68 back in 2008. Mohr says consumer debt isn’t a huge concern just because the GDP (gross domestic product) is growing. However, he did fail to mention what happens as debt rises and there’s a sudden drop in GDP.  That would be a massive collapse.  Therefore, U.S. consumer debt is always worrisome, especially when it reaches historic levels.

Low interest rates have helped people to keep their debts repayable, even as most live paycheck to paycheck without enough in savings to cover emergencies.  This suggests that one small “blip” in this economy could send the house of cards crashing down.

Economic expert James Davis says now is not the time to pile on more debt.  In fact, the opposite should be happening. Davis suggests paying off your debts right now, as a crash is inevitable, regardless of the timing.

This can be done now, without knowing when the markets will collapse. Start paying everything off and hold off on new debt until more is known about the upcoming market crash.  Now is not the time to make rash or risky decisions. If you play the game right, you will be able to leverage during the crash and profit from it.

While no one really knows the timing of the next stock market crash, it could be this summer or next, but what we do know is that there are ways to protect your money even if you are invested in the stock market. –James Davis, Future Money Trends

Carrying liabilities through a recession is not the way to gain assets. Preparing for any financial downturn (recession, job loss, medical emergency, etc.) should all begin with the elimination of your debts, according to personal wealth experts. Once that’s achieved, an emergency fund of some sort should be set up – whether you choose precious metals or a savings account is up to you. Both have merits, and we like Davis’ advice: diversify.

If you need help getting past the point of living paycheck to paycheck, follow James Davis at Future Money Trends, or consider following Dave Ramsey’s baby steps. Ramsey’s Total Money Makeover is the simplest, most straightforward game plan for completely making over your money habits. And it’s based on results, not pie-in-the-sky fantasies or get rich quick schemes.

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Author: Mac Slavo
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Date: June 24th, 2019
Website: www.SHTFplan.com

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24 Comments...

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  1. Seminole Wind says:

    Duh? Things are more expensive than they were in 2009. Look at me, I’m an economic expert now, YAHOO!

    Watch out fur dem hogs n gators

    • rellik says:

      I disagree.
      Things are about as expensive now as they were
      when I was a kid.
      What has really changed is the amount of Democrat
      government interference and regulation.
      I remember gasoline @ $0.23 a gallon.
      EPA and Democrats destroyed that, not supply,
      we have plenty.
      I remember a 6 pack of Bud 16 oz
      being $2.00, now it is $10.00.
      Democrats did that.
      I could go on and on.
      Our problem is Democrats.
      We need a divorce. Let them go their own way.
      That is what 2020 should be all about.
      I don’t say that lightly.
      I’m an old man and I would not do a thing to
      save the life of a Democrat or a million of them.
      They are killing me everyday.

      • Kevin2 says:

        rellik

        Let me put in my two bits. The money supply massively increased. I remember gas pre 1973 at 23 cents a gallon and a nice home was $15,000 a nice new car $3000. A terrific industrial wage $10,000 / yr. The car today is much better. That terrific wage is now $100,000, the home $150,000 and the gasoline, cleaner (no lead) $2.50 gallon. Democrat & Republican are both guilty of contributing to the increase in M1.

        • rellik says:

          K2,
          I understand M1 and M2.
          But you rather support my case.
          Why is my home worth nearly
          1 million dollars?
          Granted I’m in an “exotic” location.
          It is not very exotic, maybe I’ve been
          here too long.
          But be real, for all the hassle
          of living here it should be worth
          less than a swamp land in Mississippi.
          Government regulations
          screw everything up.

          • Kevin2 says:

            rellik

            Government regulations didn’t raise the M1 supply, government spending on everything from bloated entitlements to a massive military far above defense needs did. Your home likely was $100,000 in 1970. Your home is worth a million because of supply and demand.

          • Anonymous says:

            It’s probably time to step away from the Internet for awhile whenever Hawaii isn’t looking “exotic” anymore..

      • Anonymous says:

        Rellik;

        It’s all about supply and demand.
        The reason a 6pk of 16oz Bud costs $10 is because of where you live.
        I just bought a 30pk of Bud today for $22,tax included,but I don’t live in a tropical paradise..A person would be hard pressed to find a tourist destination in the US where prices across the entire board weren’t expensive..Hawaii is absolutely gorgeous,but there’s a price to pay if you wanna live there..

      • Anonymous says:

        Things are more expensive when you figure in the downsizing and inferior quality compared to years ago.

        • Kevin2 says:

          I agree on quality on consumer goods. We have went through clothes washers (Maytag & Samsung) after 5 years. Stuff my parents bought lasted decades. Automobiles however are much better. The “kiss of death” was 100K miles, now cars last twice as long. I can speak with knowledge regarding lube oil. The best petroleum based auto lubes in 1980 aren’t even salable today as even petroleum based lube oil is that much better now. If one looks at synthetic the quality is in multiples.

      • Bonefortoona says:

        Not sure I agree with letting them go their own way. Lets say we allow them to have their own country which would border ours. How long would the people their start seeking Asylum in our non shithole country.

        Instead, I say lets fight them for it, before I get to old to see through my scope. I am tired of their crap and their pie holes anyway.

  2. Bert says:

    “… a record number of Americans living on the edge of disaster.”

    DUHHHHH, did you also factor the fact that the US population is ALSO at a record high?

    No you didn’t u f idiot.

    OBTW, the top 50% is doing great!! It is the bottom 50% that are freeloading on us. You want to point the finger at the shit, go ahead, but it is not the top 50% that is the shit!

  3. Son of patriot says:

    Easy Credit, along with high prices on everything. High Debt creates unease in people, and rightfully so. It’s also produced millions of recruits for the Socialists.

    We need to, if you are a secessionist, to likewise harness this unease into OUR Didactics, Tactics and Polemics. A sales pitch from us woul be, “Support Secession and receive 100% debt forgiveness”.

    When the seceeders switch to another currency, that will be a great place for a “Restart”. Granted our Bankers will be leary of handing out credit and loans for years, but that’s better than never being able to get away from Washington and the Leftists. Society losing credit from bankers will be better than us losing our freedom and our souls.

    This is the reason that, quixotically, the left under Obama used alot of Banker Elitists in his administration. It’s why the country plunged even further into national debt under him, it takes us closer to midnight. They know that too.

    They want people to stay in this debt slavery to create recruits for themselves. As long as there is debt pain there is a perceived “Greivance” against the establishment, and a need for “Transformation”..

  4. I don’t agree that paying off “all” your debts comes before saving for an emergency slush fund. That’s nuts.

    That is paramount to placing the loaner before yourself in importance.

    Take ten percent of your actual income off the top, ten percent is your emergency fund, period.

    That is so basic to emergency preparedness. Keep your emergency fund in cash. Or keep some in the bank and some in cash.

    Stop listening to gurus who have never had to balance a budget on a shoestring.

    .

    .

    • Heartless says:

      Honey, the perfect credit score is zero. Not being in debt is the most liberating thing you can achieve. And once that’s done, keep paying those payments you had to make …. to yourself. There’s your savings/emergency fund.

  5. Honeypot is correct in not paying down debt first.
    I guarantee that the extra payment toward principal for a few years won’t mean squat when you can’t make that mortgage pmt.
    Get a huge safety net saving for ‘at least’ 3 months’ mortgage and monthly expenses–and I am not talking about smart phone/internet/cable!!!!
    This advice from a mortgage lender 40 years ago.

  6. rellik says:

    JJ,
    When I had a mortgage.
    I worked hard to kept a year in a bank.
    You cannot believe what it
    is like when you own the “pot you pee in”.
    House debt free since 1990 or so,
    0ther than Democrat property taxes.

  7. asshat says:

    in jewish tradition every 50 years there would be a debt jubilee where debts were forgiven. that may have worked in the old days. what would happen nowadays when the guy owed $ dont get paid. there is calls for student loan debt to be forgiven. problem is that is only 1 bubble what about consumer credit card debt car loan debt morgage debt. its gonna be ugly.

  8. rellik…I have no relatives, no friends, etc.
    When there is no one to care for me, I will be sent to a home for the elderly. I don’t want a house free and clear for the govt. to take. I have a mortgage now less than most pay for rent.

  9. john stiner says:

    How long before the Democrats promise to pay off credit card debt?

  10. Bonefortoona says:

    The debt is unsustainable. All debts will be forgiven soon enough when the US is bankrupt and the dollar becomes unprintable toilet paper. Until then, cash out your credit cards and pay off your mortgage and purchase a store of wealth. Primarily property, but gold and silver is nice to have. Who cares if your CC debt remains unpaid. Who are they going to send to collect on it?

  11. Anonymous says:

    Wisdom is learning from the mistakes of others. Sadly, I didn’t. However, this only had to happen to me ONCE. I am now not only out of debt but significantly net positive, and my medical expenses (which I am paying 100%) for extended family are astronomical.

    Learn to pick up a fucking Chilton’s manual. Honestly, what level of mental deficiency does it take to do full price auto loans?

    Let alone keep INSISTING on repeating the same mistake over… and over… and over… and over…

  12. Bilge Pump McCoy says:

    Paying off debt is a laudable goal but unfortunately, our so-called “representatives” are unwilling to do their part. They pile on the debt so they can fulfil their promises of “free stuff” to get the votes they need to stay in office. Until the American public stops voting for these liars and starts demanding accountability and responsible spending, the government debts will never be paid and the budget will never be balanced. Brace for impact.

  13. Dean says:

    If the Dims would “forgive” credit card debt somehow, they’d be a shoo-in in 2020. Forget about curing cancer by Pedo Joe.

  14. Bruce Wayne says:

    the entire student debt is somewhere over 1.4 trillion and this is after Obama and the democrats created another bubble by instructing the banks to give college loans to many millions of scholastic flunky’s, especially African and Hispanics and now those people are not paying back those loans, nor did a very high percentage actually learn the stuff they were supposed to.

    the result now, is that Bernie and Ocasio want to make the taxpayers pick up this tab to take the burden off the banks and the government that created this mess…………another burden on taxpayers which may sound nice as Bernie talks about the wonders of free schooling…….but they already tried it and this push is designed to give the bill to U.S. taxpayers for all those .stupid college loans to flunky students

    the student loans made the economy look good for a while as all that money for waisted student loans was going into the economy. this was Obama, and Pelosy and Hillary pushing this and the result is now a banking system that is in trouble again because pf government giveaways to minoritys just like what happened in the housing crisis that led to the 2008 market crash and bank bailout……………this push by Bernie shows his link to the banks from behind the scenes.

    in 2008, the banks got into trouble because a high percentage of those home loans, that the government had forced the banks to give Africans and Latinos through fanny May and Freddie Mac, were not being paid back which got the banks into big trouble……………..and as soon as that got cleared up, Obama and Hillary and Nancy began to play the same dirty trick with student loans and again, those minority’s just took the loans and are not paying the money back, nor did they get many of the college degrees because, they claim that the curriculum is racist.