Credit card debt in the US is getting out of hand

[William Gaatjes]

Next subprime mortgage alike financial pandemic is coming ?

 

[MrSquished]

Wages are fine, it's the costs of living that's the problem,

Ummm. So then wages are not fine then are they. You literally make that argument in those words above. What makes wages fine is when they cover the cost of living and then some to actually live life. So they are not fine.

I mean especially when the corporate and very wealthy class keep making more and more and taking more and more of a share of it, sure seems like there is money for higher wages there, it just happens to be getting hoarded by a small group of people.

 

[AdamK47]

Next subprime mortgage alike financial pandemic is coming ?

Won't have anything like a subprime mortgage failure with the causes for that being regulated. Some other form of consumer credit/loan crisis, maybe. The data is lining up.

Auto loan delinquencies are also up year over year. People taking out loans with monthly payments out of line with monthly income at crazy rates and duration.

 

[AdamK47]

The average middle-class person in the US is getting squeezed from every angle with mortgage, auto loans, and credit cards. Most of it being their own fault. It's not sustainable.

 

[Exterous]

And did you have any "emergency fund"?

Fortunately yes - so manageable although not without some stress

 

[Fenixgoon]

In a perfect world there would be a section in the charter of rights that dictates that taxes cannot be used for the ruling class's pleasure, or go out of the country, and that we can't pay more than 10% of our entire salary, and it has to go back to the people in the form of services.

Unfortunately it's not a perfect world and the ones using our money for their pleasure are also the ones that make the tax rules and take the money. Basically it's like a mafia, except legal.

Really people need to rise up against this, but not enough people seem to care. Farmers are starting to rise up in many countries but unless a good majority of the people join I don't think much will come of it.

The government doesn't directly cut checks to CXOs for yachts. It's called profits and excess compensation.

I'll let you guess on what mechanisms would serve as checks against ridiculous levels of corporate compensation and profits.

 

[Lost_in_the_HTTP]

Won't have anything like a subprime mortgage failure with the causes for that being regulated. Some other form of consumer credit/loan crisis, maybe. The data is lining up.

Auto loan delinquencies are also up year over year. People taking out loans with monthly payments out of line with monthly income at crazy rates and duration.

One issue there is people don't always consider auto insurance rates which can be several hundred per month. And these fancy automotivable machines can't be worked on by the average backyard yokel, so service has to be added in to even change a light bulb, at higher hourly rates for the super techs.

 

[William Gaatjes]

The average middle-class person in the US is getting squeezed from every angle with mortgage, auto loans, and credit cards. Most of it being their own fault. It's not sustainable.

Sighh... A second financial pandemic is coming or just a country wide financial crisis i guess...

https://www.usdebtclock.org/

 

[manly]

So how is reducing taxes going to improve any of that? You realize that the difference will be even more money going to those ruling elites?

He proposes the governing philosophy of the fine State of Mississippi, but with even lower federal income taxes.

Yes, American consumers are spending like drunken sailors (belying their stated opinions of the national economy), but consumer CC debt is not "getting out of hand" yet. There are some signs of stress on pocketbooks, but nothing like around 2010 in the depths of the Great Recession. I think there should be more concern about the $1.6T in auto loan debt in the U.S.

 

[Red Squirrel]

The government doesn't directly cut checks to CXOs for yachts. It's called profits and excess compensation.

I'll let you guess on what mechanisms would serve as checks against ridiculous levels of corporate compensation and profits.

They may not cut cheques directly but they raise taxes on us, then give themselves a wage increase, that's typically how they do it. Then there's lobbying and all that side corruption too. They also make sure to stay in power long enough to collect their pensions. Everything they do is so they can personally gain money, at our expense. This is why the NDP is not calling an early election because Rolex Robinhood would lose out on his pension.

 

[AdamK47]

One issue there is people don't always consider auto insurance rates which can be several hundred per month. And these fancy automotivable machines can't be worked on by the average backyard yokel, so service has to be added in to even change a light bulb, at higher hourly rates for the super techs.

Like this 21 year old kid with a 4 cylinder Mustang.

Spoiler: $556 car payment with a $770 insurance payment per month.

 

[H T C]

Fortunately yes - so manageable although not without some stress

As you stated, the magnitude of your "unexpected expenses" was well over what you had in your "emergency fund", to the point that it was "stressful"

How do you think you would have weathered those HUGE "unexpected expenses" without your "emergency fund", financially speaking?

 

[Stiff Clamp]

Is that so?
Then . . . now's a good time to call your card issuer and request a lower interest rate (on purchases)??

 

[Fenixgoon]

Like this 21 year old kid with a 4 cylinder Mustang.

Spoiler: $556 car payment with a $770 insurance payment per month.

Feature not a bug.

 

[Lost_in_the_HTTP]

Auto loan forgiveness?

 

[[DHT]Osiris]

In a perfect world there would be a section in the charter of rights that dictates that taxes cannot be used for the ruling class's pleasure, or go out of the country, and that we can't pay more than 10% of our entire salary, and it has to go back to the people in the form of services.

Unfortunately it's not a perfect world and the ones using our money for their pleasure are also the ones that make the tax rules and take the money. Basically it's like a mafia, except legal.

Really people need to rise up against this, but not enough people seem to care. Farmers are starting to rise up in many countries but unless a good majority of the people join I don't think much will come of it.

Plot twist, what you want requires oversight and more taxes.

 

[Red Squirrel]

Plot twist, what you want requires oversight and more taxes.

Or we can simply have accountability in the system and get rid of corruption and gross waste of funds, and force the government to only be able to spend a fixed budget. Just like we all have to do in our own households. Imagine that!

Of course that's never going to happen because it goes against the very people who have the power to make that happen.

 

[IronWing]

Or we can simply have accountability in the system and get rid of corruption and gross waste of funds, and force the government to only be able to spend a fixed budget. Just like we all have to do in our own households. Imagine that!

Of course that's never going to happen because it goes against the very people who have the power to make that happen.

Government finances are nothing like household finances nor should they be.

 

[[DHT]Osiris]

Or we can simply have accountability in the system and get rid of corruption and gross waste of funds, and force the government to only be able to spend a fixed budget.

You literally cannot have that without oversight, regulation, and auditing, all of which cost money.

 

[MrSquished]

Or we can simply have accountability in the system and get rid of corruption and gross waste of funds, and force the government to only be able to spend a fixed budget. Just like we all have to do in our own households. Imagine that!

Of course that's never going to happen because it goes against the very people who have the power to make that happen.

so you mean the rich who have the most power in getting tax evasion built into the system they help keep in power right?

 

[Red Squirrel]

You literally cannot have that without oversight, regulation, and auditing, all of which cost money.

Just put it in the charter, that they're not allowed to take more than 10%. They are forced to make it work, since they can't just keep taking more.

 

[Red Squirrel]

Government finances are nothing like household finances nor should they be.

Why not? It shouldn't be accepted that government budgets are run by a bunch of morons that don't know how to manage money and even admit that they don't think about monetary policy because they think "the budget will balance itself". Trudeau has spent more money in his term than every single prime minister combined.

 

[MrSquished]

Just put it in the charter, that they're not allowed to take more than 10%. They are forced to make it work, since they can't just keep taking more.

Every time you think Squirrel just may be wising up just a little teeny bit, I mean just perhaps even the tiniest sliver of awareness, a bare twinkle of light in the black hole of his mind, potentially having a fleeting glimpse of reality, he shuts the door so damn fast. A perpetual ignoramus who purposely maintains social media to spread the worst kind of misinformation. People like that are a drag to humanity's progress and evolution that is for sure.

 

[Exterous]

As you stated, the magnitude of your "unexpected expenses" was well over what you had in your "emergency fund", to the point that it was "stressful"

How do you think you would have weathered those HUGE "unexpected expenses" without your "emergency fund", financially speaking?

I don't think I said 'well over'. But to your question we've saved between 25-30% of our income for retirement since our very early 30s and budget a fair bit for travel and a new car to replace one of our older and owned outright vehicles. So, without the emergency fund, one of those buckets would have to suffice.

 

[H T C]

So, without the emergency fund, one of those buckets would have to suffice.

So you had a "fall back to fund" besides the "emergency fund", but my question was intended on a what if you didn't have that "fall back to fund".

When suddenly faced with expenses of that magnitude, and with only "the usual" monthly income @ hand: what then?


Obviously, a "regular emergency fund" IS NOT SUPPOSED to tackle expenses of THAT magnitude: if it were me, i'd have to take up a bank loan because that would be well WELL OVER what i have in MY "emergency fund" but, and THIS IS THE POINT, the fact i have such a fund would ALLEVIATE the problem.


Ironically, i created my "emergency fund" BECAUSE of my house payments and the fact that the bank OMITTED something when i made the deed of the house: when being proposed a date, they failed to mention that it would be ANTICIPATED because of February.

They proposed the 30th as the day for the deed and house payments, and i agreed thinking because my paycheck arrives on the 28th, i'll have TWO DAYS to spare ... WRONG ... because of February, it was moved up to the 27th so, and because of ONE DAY, i had to have the money for the house payment in the bank BEFORE receiving the next paycheck, and I COULD NOT move the day of house payments.

In the beginning, the house payment represented roughly 55% of my income, so money was VERY TIGHT then.

Then Euribor rose sharply and house payment represented around 65% of my income, despite me having my salary raised several times up to that point, which made the problem worse ... and i sacrificed my holidays more than once to keep finances in check ... and then the financial crisis of 2007 struck ...

All of a sudden, Euribor tanked and the house payment represented around 40% of my income and, shortly after, i could afford to have a full paycheck "on hand", and that's when i saw that news "savings segment" on TV talking about how a person would save A LOT MORE amortizing, instead of having the money in the bank earning interest, ESPECIALLY with rates so low (because of the financial crisis), so i started to REALLY save up money in order to amortize.

Having a full paycheck "on hand" WORKED WONDERS, so i kept doing it, INCLUDING when i amortized: would save up until i had the amortization value PLUS 1 full paycheck AND THEN amortize.

The "weight" of a house payment on my income kept going down as i was getting raises over the years, and it went down even more when i amortized: just before liquidating the house payments, the "weight" of a house payment on my income was around 10%.