While Congress and the White House are arguing about whether to raise the government’s borrowing limit, there’s another form of debt Americans should be concerned about.
According to a the New York Federal Reserve Bank report, total household debt increased to $16.51 trillion in the third quarter 2022.
That includes mortgages, car notes, credit cards, student loans and other debts.
Perhaps most troubling is that we owe nearly $1 trillion just on credit cards and the amount of such debt Americans are carrying is growing at the highest rate in 20 years.
If current inflation continues, no doubt more folks will be living on plastic. And when prices come down, the debt remains — with interest adding more and more.
The question is whether it’s sustainable — meaning we can continue to scrape by scraping by — or whether it will all coming crashing down on us, much like the 2008 housing crash when millions of Americans — including some right here in Texarkana — lost their homes, jobs and retirement savings.
We don’t know the answer. We do, however, see red flags. Prices are up, debt keeps rising and incomes for many still remain stagnant. That means a whole lot of us are living way beyond our means.
There is always a reckoning down the road. How long that road may be is anyone’s guess. But in our view the wisest course for anyone is to get their financial house in order. A strong foundation cis the best way to ride out future storm.
Print Headline: EDITORIAL/Red Ink: While Washington fights over debt ceiling, Americans keep using credit cards
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