10 Numbers That Prove That America’s Current Financial Condition Is A Horror Show
By Michael Snyder
TheEconomicCollapseBlog.com
August 13, 2018
America’s long-term “balance sheet numbers” just continue to get progressively worse. Unfortunately, since the stock market has been soaring and the GDP numbers look okay, most Americans assume that the U.S. economy is doing just fine. But the stock market was soaring and the GDP numbers looked okay just prior to the great financial crisis of 2008 as well, and we saw how that turned out. The truth is that GDP is not the best measure for the health of the economy. Judging the U.S. economy by GDP is basically like measuring the financial health of an individual by how much money he or she spends, and I will attempt to illustrate that in this article.
If I went out right now and got a whole bunch of new credit cards and started spending money like there was no tomorrow, would that mean that my financial condition had improved?
No, in fact it would mean that my long-term financial condition just got a whole lot worse.
GDP is a measurement of how much economic activity is happening in our society, and it is basically an indication of how much money is changing hands.
But just because more money is changing hands does not mean that things are going well. What really matters is what is happening to assets and liabilities. In other words, is wealth being built or is more debt just being accumulated?
Sadly, there are only a handful of bright spots in our economy. A couple of very large tech companies such as Apple are accumulating wealth, but just about everywhere else you look debt is growing at an unprecedented pace. Household debt has never been higher, corporate debt has doubled since the last financial crisis, state and local government debt is at record highs, and the U.S. national debt is wildly out of control.
If I went out tomorrow and spent $20,000 with a bunch of new credit cards, I could claim that my “personal GDP” was soaring because I was spending a lot more money then before. But my boasting would be pointless because in reality I would just be putting my family in an extremely precarious financial position.
Economic growth that is produced by continually increasing amounts of debt is not a positive thing. I wish that more people understood this very basic concept. The following are 10 numbers that prove that America’s current financial condition is a horror show…
#1 U.S. consumer credit just hit another all-time record high. In the second quarter of 2008, total consumer credit reached a grand total of 2.63 trillion dollars, and now ten years later that number has soared to 3.87 trillion dollars. That is an increase of 48 percent in just one decade.
#2 Student loan debt has surpassed 1.5 trillion dollars for the first time ever. Over the last 8 years, the total amount of student loan debt has shot up 79 percent in the United States.
#3 According to the Federal Reserve, the credit card default rate in the U.S. has risen for 7 quarters in a row.
The Rest…HERE
