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Household debt in the U.S. is at 20 year highs. Household savings levels have completely collapsed. Inflation is still ripping. Clearly the Biden administratio

Household debt in the U.S. is at 20 year highs. Household savings levels have completely collapsed. Inflation is still ripping. Clearly the Biden administration understands that these factors, when combined with a huge supply shock caused by a rail strike, would devastate households (the vast majority of which don't earn premium tech salaries - the median household income in the U.S. is $70K). How many millions would need to go bankrupt before you would reverse your position? This is the calculus being done by Biden's admin.

bumby 4y ago
>Household debt in the U.S. is at 20 year highs. Isn't the largest share of household debt a home mortgage? Implying that talking about the rail strike is a distraction from the root cause. There are still real consequences to Americans from the rail strike, but (very much like the student debt crisis) it seems like tap dancing around the root cause doesn't really fix the problem.
- scottLobster 4y ago
  Perhaps largest in aggregate, but credit card debt has spiked in the last year and is continuing to climb higher, close to a Trillion dollars. https://www.lendingtree.com/credit-cards/credit-card-debt-statistics/ https://www.lendingtree.com/credit-cards/credit-card-debt-st... A large chunk of the population is clearly dealing with inflation through credit cards. More inflation for them just means more CC debt, and if everyone is getting as many "free balance transfer no interest for the first year" offers in the mail that I am, that's some extra fuel for a crisis.
  - bumby 4y ago
    Both of these can be true. All I’m saying is it makes more sense to focus on the biggest issue for the biggest impact. Average credit card debt is roughly on par with pre-pandemic levels. Dipping during Covid is probably an artifact of the govt stimulus (speculatively). Without digging further, it’s not clear to me that it’s not a return to normal. If that normal is still bad, my guess is there are more deeply rooted issues.
    - scottLobster 4y ago
      I guess the question is are saving rates low because of mortgages or because of CC debt? I'd tend to lean toward CC debt, as a good chunk of the population doesn't even have a mortgage, the cost is typically fixed, and you don't take out an extra mortgage to pay for 15% inflation in food, you put it on a CC. CC debt is also far more damaging to household finances, particularly during high inflation as you're just piling ~%20 CC interest rates on top of the inflation rate. So a "return to normal" is going to be far more damaging in 2022/2023 conditions than it would be in 2019 conditions. There's also no indication that CC debt is going to level out, the "normal" in 2019 was an upward spike as it was, and inflation is likely going to continue due to structural factors, which is going to continue to force people to compensate, which likely means an even sharper increase in CC debt. Getting back to the potential railroad strike, put an extra 10% inflation on top of everything and for many people that's another 30% after they put it on a CC they can't/don't pay off. For many households it would appear we're looking at literally exponentially increasing levels of debt, mostly fueled by CCs and high inflation. That's a crisis.
      - bumby 4y ago
        >I'd tend to lean toward CC debt I think I would lean toward household mortgage. The reason is simple. With a quick (and admittedly superficial) search, the average minimum credit card payment was $110, while the average monthly mortgage or rent payment was $2100. Despite the fact that many people don't have mortgages, they still need a place to live, and you can't decouple rent and home prices. Which is particularly pernicious for renters because their home costs are not fixed. Add to it that many people use their home equity as a revolving credit line and I don't think the costs are as fixed as one might first assume. I think an underlying issue is that people have an optimism bias in terms of budgeting. They live riiiiight up to their level of income. I think the stat goes back at least a decade, but something like 65% of Americans cannot afford an unforeseen $500 emergency. Some of this is attributable to wage stagnation, but I also think much of it is due to another type of inflation: lifestyle inflation.
  - bombcar 4y ago
    A trillion dollars in credit card debt is about $9k per household, or $5k per adult in the US. And some percentage of that is paid off each month (but I'm not clear how to determine that - seems it might be 54% of cards but that doesn't answer "of dollars").
naasking 4y ago
> Household debt in the U.S. is at 20 year highs. Household savings levels have completely collapsed. Inflation is still ripping. Inflation is largely caused by the same issues driving this rail strike: corporate profits. Maybe Biden should actually tackle directly that rather than continuing to shit on the working class.
- Workaccount2 4y ago
  >Corporate profits In the social media circle-jerk, yeah. In economist circles that include the advisors consulting on policy, no. Corporations are/have always tried to maximise cost and profits. They didn't suddenly decide to get greedy 18 months ago. "Blaming inflation on corporate profits is like blaming gravity for a plane crash, technically right but totally misguided." Remember, gravity is always trying to crash a plane. Frankly I will always side with expert opinion over karma farming social media commentary. I know it feels good to blame the shadowy cabal of fat men with a top hats and eye pieces, but it's just not what is going on.
  - naasking 4y ago
    > Corporations are/have always tried to maximise cost and profits. They didn't suddenly decide to get greedy 18 months ago. Actually they did: https://www.youtube.com/watch?v=Ai6B8e-C8k8#t=10m46s https://www.youtube.com/watch?v=Ai6B8e-C8k8#t=10m46s They exploited the supply chain disruptions to justified price increases that weren't warranted. The data is pretty clear on this point so I don't know what "experts" you're listening to.
    - Workaccount2 4y ago
      Nothing you stated or linked contradicts what I said. Corporations have always been greedy and will always capitalise on anything that can be used to increase profits. Blaming corporations is a miss because they are acting exactly the way they have always acted, they way they are expected to act, and the way they will act. Hence the example "It's like blaming gravity for a plane crash". Gravity's behavior is a constant, its something else on the plane that failed.

bumby 4y ago

>Household debt in the U.S. is at 20 year highs. Isn't the largest share of household debt a home mortgage? Implying that talking about the rail strike is a distraction from the root cause. There are still real consequences to Americans from the rail strike, but (very much like the student debt crisis) it seems like tap dancing around the root cause doesn't really fix the problem.

scottLobster 4y ago
Perhaps largest in aggregate, but credit card debt has spiked in the last year and is continuing to climb higher, close to a Trillion dollars. https://www.lendingtree.com/credit-cards/credit-card-debt-statistics/ https://www.lendingtree.com/credit-cards/credit-card-debt-st... A large chunk of the population is clearly dealing with inflation through credit cards. More inflation for them just means more CC debt, and if everyone is getting as many "free balance transfer no interest for the first year" offers in the mail that I am, that's some extra fuel for a crisis.
- bumby 4y ago
  Both of these can be true. All I’m saying is it makes more sense to focus on the biggest issue for the biggest impact. Average credit card debt is roughly on par with pre-pandemic levels. Dipping during Covid is probably an artifact of the govt stimulus (speculatively). Without digging further, it’s not clear to me that it’s not a return to normal. If that normal is still bad, my guess is there are more deeply rooted issues.
  - scottLobster 4y ago
    I guess the question is are saving rates low because of mortgages or because of CC debt? I'd tend to lean toward CC debt, as a good chunk of the population doesn't even have a mortgage, the cost is typically fixed, and you don't take out an extra mortgage to pay for 15% inflation in food, you put it on a CC. CC debt is also far more damaging to household finances, particularly during high inflation as you're just piling ~%20 CC interest rates on top of the inflation rate. So a "return to normal" is going to be far more damaging in 2022/2023 conditions than it would be in 2019 conditions. There's also no indication that CC debt is going to level out, the "normal" in 2019 was an upward spike as it was, and inflation is likely going to continue due to structural factors, which is going to continue to force people to compensate, which likely means an even sharper increase in CC debt. Getting back to the potential railroad strike, put an extra 10% inflation on top of everything and for many people that's another 30% after they put it on a CC they can't/don't pay off. For many households it would appear we're looking at literally exponentially increasing levels of debt, mostly fueled by CCs and high inflation. That's a crisis.
    - bumby 4y ago
      >I'd tend to lean toward CC debt I think I would lean toward household mortgage. The reason is simple. With a quick (and admittedly superficial) search, the average minimum credit card payment was $110, while the average monthly mortgage or rent payment was $2100. Despite the fact that many people don't have mortgages, they still need a place to live, and you can't decouple rent and home prices. Which is particularly pernicious for renters because their home costs are not fixed. Add to it that many people use their home equity as a revolving credit line and I don't think the costs are as fixed as one might first assume. I think an underlying issue is that people have an optimism bias in terms of budgeting. They live riiiiight up to their level of income. I think the stat goes back at least a decade, but something like 65% of Americans cannot afford an unforeseen $500 emergency. Some of this is attributable to wage stagnation, but I also think much of it is due to another type of inflation: lifestyle inflation.
- bombcar 4y ago
  A trillion dollars in credit card debt is about $9k per household, or $5k per adult in the US. And some percentage of that is paid off each month (but I'm not clear how to determine that - seems it might be 54% of cards but that doesn't answer "of dollars").

naasking 4y ago

> Household debt in the U.S. is at 20 year highs. Household savings levels have completely collapsed. Inflation is still ripping. Inflation is largely caused by the same issues driving this rail strike: corporate profits. Maybe Biden should actually tackle directly that rather than continuing to shit on the working class.

Workaccount2 4y ago
>Corporate profits In the social media circle-jerk, yeah. In economist circles that include the advisors consulting on policy, no. Corporations are/have always tried to maximise cost and profits. They didn't suddenly decide to get greedy 18 months ago. "Blaming inflation on corporate profits is like blaming gravity for a plane crash, technically right but totally misguided." Remember, gravity is always trying to crash a plane. Frankly I will always side with expert opinion over karma farming social media commentary. I know it feels good to blame the shadowy cabal of fat men with a top hats and eye pieces, but it's just not what is going on.
- naasking 4y ago
  > Corporations are/have always tried to maximise cost and profits. They didn't suddenly decide to get greedy 18 months ago. Actually they did: https://www.youtube.com/watch?v=Ai6B8e-C8k8#t=10m46s https://www.youtube.com/watch?v=Ai6B8e-C8k8#t=10m46s They exploited the supply chain disruptions to justified price increases that weren't warranted. The data is pretty clear on this point so I don't know what "experts" you're listening to.
  - Workaccount2 4y ago
    Nothing you stated or linked contradicts what I said. Corporations have always been greedy and will always capitalise on anything that can be used to increase profits. Blaming corporations is a miss because they are acting exactly the way they have always acted, they way they are expected to act, and the way they will act. Hence the example "It's like blaming gravity for a plane crash". Gravity's behavior is a constant, its something else on the plane that failed.