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Debt Crisis In America: A Record Number Of Americans Are Behind On Car Payments

Mac Slavo
February 13th, 2019
SHTFplan.com
Comments (40) Read by 2,888 people

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Debt has become an issue of concern for those who care about their financial future. But with the government setting the terrible example of drastically spending more than they bring in, many in America are following suit and it is leading to a crisis and a red flag for the economy.

Just on the heels of the United States government’s debt surpassing $21 trillion comes the news that there are now a record number of Americans who are behind on their record high car payments. According to CNBC, more than 7 million Americans are at least 90 days behind on their auto loans, according to the New York Fed. This is a major concern, considering the average car payment in the U.S. is now $523.

“More and more people are buying too much car for what they can afford,” said Ed Mierzwinski, senior director of U.S. PIRG’s federal consumer program. Overall, auto debt accounts for about 9 percent of total U.S. consumer debt, up from 6 percent in late 2011, separate data from the Federal Reserve Bank of Kansas City show.

The amount of Americans currently in default of their car loans is higher than in 2010 when many were still reeling from the 2008 Great Recession, a statistic that is once again, showing that the U.S. economy may not be nearly as strong as the media’s talking heads present. The “number of distressed borrowers suggests that not all Americans have benefited from the strong labor market and warrants continued monitoring and analysis of this sector,” Fed economists say.

Auto debt has soared and with that comes people who cannot pay the bill they signed up for. The dramatic uptick in delinquencies came along with a dramatic $584 billion jump in total auto loan debt. That’s the highest increase in car debt since the New York Fed began keeping track 19 years ago.

Overall, household debt rose by $32 billion, or 0.2 percent, to $13.54 trillion in the fourth quarter. That’s $869 billion higher than the crisis peak of $12.68 trillion and is 21.4 percent above the post-crisis low point in the second quarter of 2013.

Student loan debt edged higher to $1.46 trillion while credit card balances rose to $870 billion, right around their crisis peak. –CNBC

These delinquencies also come as Americans grapple with record levels of consumer debt and student loan debt. In a report issued Wednesday, U.S. PIRG warns that the continuing rise in auto debt is putting many consumers in a financially vulnerable position, which could worsen during an economic downturn. Coupled with consumer and student loan debt, Americans are staring a crisis in the face.

Overall debt carried by Americans also set off red flags as that number ticked up. Americans now owe a record $13.5 trillion and global debt is also a concern. 

 

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Author: Mac Slavo
Views: Read by 2,888 people
Date: February 13th, 2019
Website: www.SHTFplan.com

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40 Comments...

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  1. beermann says:

    I feel better now lol. I only got one that I owe around 4k on. My problem is living rural and driving high miles so ill always be vehicle heavy. Id use the motorcycle more often but people drive like maniacs with one eye on the road and one on the phone, or are just plain idiots. Passing up hills. On corners. If you aren’t going 10mph over the limit you’re an obstacle. People fly by on this gravel road 50mph or better everyday. Go ahead and repo those 7 million cars. Less clowns on the road.

    There’s just too much marketing showing us all how we need to live and what we need. On the flip side if no one bought squat we’d crash so I don’t really know what to say except screw it all im tired of it.

    • lost karma says:

      I rode a street bike for 8 years – Harley Sportster, BMW K750, etc.

      I lost count of the times I’d be going down a freeway at speed only to see some idiot parked a few feet off my rear tire. Or when changing lanes having their rear bumper miss my front tire by inches. I was forced into the shoulder twice and barely managed to keep it upright.

      Of course anytime I approached an intersection I could count on a cager hanging a left right in my path.

      When I first started riding on the street an old timer told me to imagine a big bullseye on my bike and that everyone’s out to get me. He was right.

  2. Panther says:

    This is a glowing example of people’s lack of discipline. Spend more than you make is the American way of life, and the fine example set by the excellent leadership of da gubmint. What are we now, 22trillion in debt? I’m paying double payments plus $100 a month on my new truck and the plan is to pay it off in 2 years. Of course, I’m afflicted with that dreaded disease of being a workaholic. Is there a 12 step plan for that? There are people I know that hate me just because I have some nice stuff, but I work my ass off for it. Those same people are fucking lazy. I have never connected with that type of thinking. Did I tell you how much I love my new truck?

  3. Beaumont 2.0 says:

    I feel that the only legitimate use for credit is as a medium of exchange, when you have the money, but need to move it from one place to another.

    These debtors have driven up the prices, on items which they can’t even afford to buy.

    They are troublemakers, with a negative effect on the entire country, so should arguably be put in a prison.

    The only reason why we shy away from debtor’s prisons, is because we are afraid of unsolicited charges, like fake add ons.

    Otherwise, there should be debtor’s prisons. Sorry, not sorry.

    Why are these same people allowed to walk around with a chip on their shoulder, like they’re rich, and you’re poor. Checkbook math is long subtraction. You probably learned this in the third grade.

  4. Panther says:

    Oh yeah, as far as the nat’l debt goes, whenever I read that each persons share of that debt is such and such amount of money, I say GO TO HELL. As long as da gubmint confiscates dollars from my paycheck, I already paid my “fair share” and then some. Start cutting entitlement spending, make those able bodies get a job, then garnish their checks till they pay back all that they took.

  5. rellik says:

    So what?
    Until prices get back to where our wages are, this problem will only get worse. As indicated by the fact that we have Democrats, about half the country are idiots, as are about half the remaining population of can’t make up your mind independents.
    I hope it breaks soon. That will get the tourists off my island
    and a good portion of the blood sucking liberals will leave.

  6. Beaumont 2.0 says:

    Taking credit from the unworthy will help the environment!

    Let’s see an sjw come up with that solution.

  7. Whatever Works says:

    So take their cars. It will make my driving easier.

  8. Maranatha says:

    There are legal remedies for the wealthy to discharge debt but not the poor and middle class. I guess that’s fine by you?

    Debtor prisons never work. You can’t pay your debt, so you go to prison until you pay the debt. Errr What? How do you earn money while in debtor prison? You don’t. It penalizes your family, which would be like a burglar going to jail until their family pays restitution. How would that be constitutional?

    What happened in history was there were so MANY in debtor prisons that DEPORTMENT was necessary. Debtors were deported to places like North Carolina and Australia, and could not return on pain of death. So they were in essence indentured sevants working off the debt ie SLAVES and then that allowed the creation of colonies.

    How the heck would that work today? Would the USA send delinquent college students who could not pay their debts to Japan as indentured servants/slaves??? Japan needs them, and we already have one of largest prison societies in the world, so we cannot pay for all these new prisoners so slavery is back in vogue???

    Let’s get real. The reason we have inflation is free trade destroyed decent paying American manufacturing jobs and replaced them with slave labor in China. That caused the government to create more government jobs to pick up the loss. That created more deficit spending. The low wages of the remaining jobs meant the Democrats created more deficit spending in social programs.

    Now that is imploding in places like Illinois, and even in podunk Kentucky cities of 1,000 people, there are no country deputies as Obama blew up the coal industry. You are going to see massive unemployment as government workers get RIFed.

    Now we have students who come out of universities owing massive student debt and there are insufficient jobs that will ever pay off their debts.

    In the last 48 hours, there was a story about young couples being so strapped for cash that they are going in with two other couples to buy a home. Translation: communes. The USA is becoming like the 1970s USSR where many families lived together in overcrowded conditions.

    • Maranatha says:

      htt ps://en.m.wikipedia.org/wiki/Debtors’_prison
      Inevitably, the crimes of the criminal in a debtor prison harms their family AND the price is ruinous for the country due to running the facility plus infrastructure maintenance.

      It is colossal political stupidity and national sabotage.

      You do realize that Obama through executive orders authorized seizure of all wealth and resources AND can create labor camps for any Americans AND not even pay those slaves, right?

    • Beaumont 2.0 says:

      m said, “There are legal remedies for the wealthy to discharge debt but not the poor and middle class.”

      Let’s say that only the poor are thrown in debtors prisons, for the sake of hyperbole. Then, who will feed the effete. Tell these indigents, just barely hanging in the margins of society, there is no life guard on duty. You’re gonna do hard labor, say, in the mines. Don’t try it. What happens to the pyramid schemers, then. Will they still speculate on inflated cars, housing, and useless toys. Are the debt swaps commensurate with the value of prison labor.

      M said, “I guess that’s fine by you?”

      Not at all. Send them to Red China or North Korea for punishment, where they at least know how to deal with people who embarrass their country.

      M said, “You are going to see massive unemployment as government workers get RIFed”.

      The ones who have bbq’s on Mayday and who cosplay as historical Communists, in the Labor Day parade. Fists of solidarity emblems on the work truck.

      They haves some kind of atavistic hatred for the indies and will do sabotage to the point of physical damage, in my experience.

      • Beaumont 2.0 says:

        This work is 99% turnkey. Could be performed by prison labor — like at the city dump — so these people will finally realize they are civil servants and not the masters.

        D+, C- students. Ditch diggers, who got perfect attendance, a pension, and a massive chip on their shoulder, could easily be replaced with rejects, under careful watch.

      • Maranatha says:

        What you say has been proven NOT to work, and it’s repulsive to voluntarily create slaves and send them to carry water in communist countries.

        Reply when you’re sober and thinking straight.

        Most prisons COST the public to operate so that’s a NET LOSS. The Constitution won’t allow for slavery or cruel and unusual punishment and techncally debtor prisons are illegal (unconstitutional).

        While the EU was so desperate for warm bodies that they let literally any fool to pose as a refugee, knowing criminal thugs and crazed Jihadists were among them, they might just as easily and in safety created an America immigration program.

        Essentially Japan is doing that NOW as they have a severe issue with too many pensioners, and a dwindling birth rate, and Japanese ladies want to desperately marry. The Japanese due to extreme xenophobia are going EXTINCT.

        • Maranatha says:

          Crazy Angela Merkel thought she could bail out her pensioners with 3rd world ill-educated Muslims. That’s nuttier than a fruitcake. Look at what happened while the nationalists are saying, “Told ya so”.

          She could have easily fulfilled the EU’s immigration goals from Canada and the USA PLUS these young people already think like Europeans anyway. And the need was in big cties where English is widely spoken. Everybody wins and then the Swedish women don’t fear routine sexual assault nor are there immigrant battlezones.

  9. Old Guy says:

    We already have debtors Prisons. There are plenty of folks jailed for non Payment of Fines & child support. Yes its the easy credit that led to inflated prices. The prices had to be inflated enough so those who pay their debt cover the loss from the Deadbeats. Ive found if you save to buy something many times by the time you get the money saved you like the money better than the desired item. Easy credit makes impulse buying too attractive. Im debt free. and don’t feel sorry for anyone who willingly goes in debt and cannot pay. They made their bed let them lie in it. The same goes for folks who lend to uncredit worthy folks and don’t get paid. Let those lenders go broke.

    • Redwinger says:

      Or, that I’ve found out, that by the time you save the money for something that was $1000, the price had went up to $1500. So yeah, you’re right sometimes the saved money is better than the desired item.

  10. The Deplorable Renegade says:

    Old Guy, good points. I’ve always bought my vehicles from private owners for cash only. Pay the whole price right up front on the spot and you don’t have any stinkin’ car note to worry about. I’ve always had liability insurance on every one I’ve owned. Never had full coverage on anything. I’ve never had to worry about the repo man. I’m debt free and don’t apologize for it.

    • cranerigger says:

      Deplorable Renegade, you’re a good man for reminding folks about the dangers of debt.

      I made the mistake, at a much younger age, of trying to “keep up with the Joneses”. I bought stuff I couldn’t afford on credit. A little time went by and my financial well-being went over the cliff. Now I know what a damn-fool I was.

      • The Deplorable Renegade says:

        Cranerigger, thank you for that. I don’t make enough money to even WORRY about credit and I don’t even care what the Joneses have. I use cash all that I can. I don’t let any kind of debt take away from my prepping.

  11. Kevin2 says:

    1. The delta between wages and prices have facilitated debt.

    2. Cars today have unnecessary “bells and whistles”. It’s not difficult but impossible to find a basic car like the old Volkswagen Beetle or Ford Falcon. Modern manufacturing could produce this type vehicle for $10,000, I have no doubt.

    3. Banks don’t need to care about loaning to poor credit risks because Uncle Sam bails them out.

    4. The prudence of financial discipline has been systematically replaced with debt driven consumerism post August 1971 the closing of the gold window.

    • Beaumont 2.0 says:

      k says, “The delta between wages and prices have facilitated debt.”

      Conversely, the delta between wages and prices has been facilitated by debt.

      The employer wants to buy labor, below cost, if you can’t even afford the trip to a job site. He is uncompetitive.

      The market in consumer goods is uncompetitive.

      Tiny Tim Cratchit, acting as though money is no object, because he can borrow irresponsibly, is exacerbating the parasitic employer and middleman. Money is no object. You can be on welfare and in debt, rather than your boss paying ordinary living expenses, needed to support yourself, comfortably, at modern living standards.

      Prices can be askew, because money is no object. You can pay a wheelbarrow full of cash for that Wiemar cabbage or loaf of bread, because they’re just placeholders. Write any figure you want, because it’s rhetorical.

      • Kevin2 says:

        I grew up in an area that was heavy in the chemical and petroleum industries. At least 30K jobs were there in the late 1970s. Today roughly 3K. Manufacturing, namely GM & Chrysler went from an additional 5000 to zero. Adjusted for inflation what is deemed as “good money” is half of what I made in the day. Conversely, homes then were 1500 Sq/Ft, they ballooned to over 3000 Sq/Ft. The NE by Philadelphia along the Delaware river faired better than many other areas even with this.

        • Beaumont 2.0 says:

          The houses are twice as big but probably on the same size of lot.

          Govts have encouraged predatory lending, because more tax dollars can be extracted from less land.

          I feel that you have found an inflection point, when city planners don’t expect a remunerative wage, for each of the occupants.

          Again, if you are going to manage an economy of scale, this math is relatively simple. Pre-highschool reading level.

          Empowered degenerates are captain on the overcrowded lifeboat — people who can’t drive a nail or use the short words.

          • Kevin2 says:

            From what I can see the lots are smaller. I believe that one day these McMansions will be modified into duplexes. The homes of grandeur on Philadelphias main line, once owned by the pre income tax rich of 1870-1910 are now high rent multi apartments.

  12. Maranatha says:

    The good news about hyperiflation is every home owner can pay off their mortage in a few weeks. Yeah! Everyone is free and clear.

    The bad news about hyperinflation is every American can no longer afford to eat, pay for utilities, or buy gasoline in following weeks.

    • Maranatha says:

      See everyone wanted to be millionaires, and now with the magic of socialism, everyone will be millionaires. But it cost a million to buy bananas.

      During the Great Depression, three industries thrived.
      1. Shoesmakers
      2. Bicycle repair
      3. Ethanol producers.

      Everybody can make shoes from old tires and not only that, they are durable and the same material can make roofing tiles. There’s your future trade. All you need are some basic tools and scrap tires.

      • Beaumont 2.0 says:

        In 2020, potable water, ramen noodles, and mj should fit somewhere on this list.

        • Maranatha says:

          They will need well diggers so some will do that. You make a well, most likely a sandpoint shallow well at first, and later a deep reliable well with a Biosand filter to ensure it’s safe and might even make a charcoal filter as well.

          There’s your opportunity.

          Some will manufacture charcoal. Just don’t fall asleep or instead of smouldering, you have a massive INTENSE fire.

          Every blacksmith will need charcoal.

          Lots of folks living near railroad tracks will be pulling up spikes for raw materials to make knives and hatchets.

    • bb in GA says:

      Mortgage payoff in hyper inflation….Not so fast.

      The Bankers Lobby would grab a handful of Congressional short hairs and they would enact an IMMEDIATE emergency freeze on paying off any mortgages (especially Govt stuff FHA, VA and anything thru FANNIE and FREDDY).

      You would find that “Contract” you signed will be “Modified” so that the Principal and/or remaining balance would be indexed (and adjustable moving forward) for the inflation SHTF that we would be experiencing.

      <bb

  13. Maranatha says:

    Y3gjNdnRSAs
    Lots of US Marines have eaten soba as a lunch dish.

    Ramen is poorly digested. Look that up as the videos are gnarly.

    EpRBxau3ou0
    Personally, I think Vietnamese Pho is better.

  14. Anonymous says:

    Kevin2 so right you bring back the memory’s. I bough a 1973 Dotson Pick-1/2 Ton for $2600 New Drove flawless for 15Yrs before I was hit buy a Drunk driver. Also the longest Finance was 36 Months. Not like Today up to 84 Months. You pay more in interest. Than The Cars principle. I’m a lot like DR. Only pay cash for used Vehicles.

  15. Remember the sub-prime mortgage idiocy? The car loans are more of the same:

    https://www.gmfinancial.com/Docs/About-Us/understanding-securitizations.pdf

    The car companies are making more off of financialization than the vehicle sales themselves. This is why they were willing to ‘sell’ cars to people who are literally incapable of paying back the loan – the finance branch figured they could foist the worthless loans (as asset-backed securities) off onto other people (pension funds, for instance), and they were right.

  16. Asshat says:

    The average American doesn’t know how much they can afford to pay for a car. They live in a dumpy apartment and drive a BMW. People also have paid for vehicles and trade them in for payments when the vehicle was in solid shape. Only time you trade a vehicle is when it won’t pass a state inspection and the repairs to fix it so it will pass will cost more than it’s worth. always buy vehicles that will meet your future needs. Trucks SUVs minivans are all good choices. Minivans are great the seats come out and you can use it to haul stuff. It also has enuff power to tow a trailer. You can usually get a deal cause they aren’t as popular as SUVs and trucks. Only down fall to minivans is no 4 wd.

  17. Maranatha says:

    Try as they might, they can’t as that would result in torches and pitchforks ie Civil War 2.0. Literally all across the political spectrum, EVERYONE and their German brother would rise up as ONE and drive the bankers into extinction.

  18. Bilge Pump McCoy says:

    I have a 20 year old Tahoe with a trade in value of less than $2,000 and it runs like a dream. I’m willing to bet I can squeeze another 12 years out of it. This should get me to the end or the world according to Democrat genius Alexandria Ocasio-Cortez. My timing is awesome.

  19. AOC and the new green deal will fix that, they won’t need cars when taking a horse or mule to work.