Credit card debt hits new record, raising warning sign

The inverse relationship between unemployment and inflation has been thoroughly disproven.

 

Of course, wages need to rise as employers bid for workers.
We're not close to that yet.

 

Credit card debt and no savings account = average American family

 

It's funny. Everybody just assumes that all these corporations who are going to get a monster windfall of tax savings are just automatically going to plow all the money into hiring more people and raising employee's salaries. Uh-huh... right.

To some extent, especially over the next year or so, that may be true. But there is another growing school of thought that companies are going to put all this money into improved methods of doing business that are more 'efficient', less costly, and much more likely to use new technologies. These would be involving robotics, streamlined points-of-sale (in brick-and-mortar stores, and on the internet), and overall cheaper labor because with better built-in technologies, companies won't have to hire high-dollar, brainiac "eggheads" to make things work smoothly.

. "You morons are fired! I'm getting a robot to do your jobs!" - "Whatever...."

 

Yes, but it's amazing how many people think nothing of blowing a thousand bucks on tattoos, a thousand bucks on a "smart" phone, another thousand bucks on a year's worth of "data plan", and more than thirty thousand bucks on a car that will take them eight years to pay off!

Can anybody still deny that we been churning out generations of totally dumbed-down public school students for the past three decades...?

.."Hey, why would I need a pot and a window when I'm THIS cool...?"

 

Exactly.

 

No one with a brain thinks that.
Demand for product needs to happen before more employees are hired.
Which is why some say tax cuts to the job creators will create jobs is called BS.

 

So we're not in an overheating economy as the OP suggested.

 

Not neccessarily. As credit markets loosen, lenders will often take "equity" in lieu. At first (on the build cycle following a downturn - I've seen several since the 1980s) that equity is usually required as excess value on real estate over loan value but it quickly turns to car titles and ultimately: "I will pay you back, honest, signed me!".

 

You are exactly right.

 

Hey, I agree with you, but, a lot of gullible people assume that "happy days are here again", just because a bunch of corporations are going to get a gigantic tax break. I'm a financial Conservative, through and through, but for many years I've observed that rash assumptions about how 'great' the trickle-down theory works in this country is, frankly, bullshit.

Anyone who automatically believes that Corporate America is going to hire lots more people and raise wages just because the corporations themselves (and their shareholders) are living 'large' should reflect on what has happened in this country for the past ~40 years -- fewer people doing more work, exhibiting "greater productivity". Meanwhile the reality is that when you call 99% of all companies, big or small, the first thing you discover is that they won't even hire enough people to answer the damned phone!

In the future you'll be dealing more and more with robotics, which may be a good thing for you as a customer (if companies ever get RID of "phone-trees" and develop intelligent robot-human interface methodologies), but it may mean the end of your job if you're an employee!

Enigma: even if companies hired more people to "answer the damned phones", what would they pay them...? Enough to fuel some big nation-wide "economic boom"...?

. "and if you're a shareholder, just think how much this phone-tree is saving the company!"

 

Not in my opinion. As I said, I think we'll see a repeat of the 2000-20007 economy. Especially if congress rolls back some of the hooks put in place on Large Banks to lend willy nilly.
And if wage increases put pressure on inflation. Which may not happen as real wages has been stagnant for a couple of decades now.

 

Now if you could get all your conservative friends to believe the truth you know.

 

Wonderful editing for effect! You should get an application for CNN bro

What you COULD have gone with LMFAO

Yes I know! Hardly meets the "Gloom and Doom" scenario but it's clearly the crux of the article

 

It's often a crazy, dysfunctional thing being an 'old guy'. I've seen our national 'pendulum' swing from one idiocy to another, back and forth, over and over. We never seem to be logical, balanced, and rational in our approach to anything. I'm retired now, and have to learn to be content with just being able to put as much distance between myself and the careening insanity as I can, as often as I can....

So: I never buy things "on credit", except for what I buy with a credit card -- the full balance on which I pay off fully every single month.

Let other people do what they think is right, but be willing to suffer the consequences.... But, sadly, the stupidity of some others always manages to 'slop over' onto the rest of us, and we end up having to 'rescue' those that are "too big to fail", while we have to put half our population on subsistence welfare programs or risk having riots in the streets....

 

Do you really think a chief strategist from a multinational bank will openly state that consumer credit card debt is a problem? Heck, that's their bread and butter.

There is no denying though that consumer credit is growing at a much faster pace than GDP, and, more importantly, wages. That is not sustainable and WILL result in another debt-driven crash, just like in 2008. You can stick your head in the sand all you want, the current "boom" attributed to Trump is really just driven by new debt taking, both private and public. An exact repeat of what happened under Reagan and GWB.

 

I quoted directly from your link, are you saying there are some discrepancies with it

 

I learned about managing credit very early on when I went to work at the shipyard on the Mississippi coast. You could get an advance on your paycheck by signing a little form. Only thing is when you got your paycheck it was short that amount so you had to take out another advance. And then the whole home equity thing when they eliminated most consumer interest deduction. Tried that and learned DO NOT use your home equity as a revolving line of credit. I HATE those ads with the navy admiral talking about what a GREAT thing it is you can put your home in hock for your credit card spending, what a disservice to young people in the military.

FICO® Score
861
as of 12/30/17
******* bank credit rating:
Excellent

 

We are pretty darn close even with the low LFPR. That is another balance that must be kept. We need to reform all sorts of welfare and government subsistence payments to get those people back into the workplace EARNING money and paying taxes but OTOH don't want to stymie wage and income growth.

 

Higher wages will take care of that.
If working is more money than welfare programs, then work it is. The vast majority on welfare programs would love to get off of them. If there are paying jobs that allow that.

 

I can hope you're right, but ten years of being on welfare of different kinds over the past 10 years has probably changed a lot of Americans forever.

Think: for a lot of them, their careers and their lives STOPPED sometime in 2008 when they were fired by Korporate Amerika. They went on unemployment benefits that lasted for 26 weeks... then that expanded to a few more months... then a full year... then two years... then three years. By then, a lot of them had learned to work the system and gotten themselves on a lot of other different welfare handout systems -- including the prize -- Disability!

They got fat, lazy, and let their appearance go to hell (as well as their crappy, old clothes), while their skills and skill-sets deteriorated with creeping, relentless obsolescence. But now they're all just going to be chopping at the bit, all 'tuned and pruned' to get back into the workforce -- now that they're ten years older, and competing with a new generation that looks better, knows more of the current in-demand skills, and is willing to work for less money?! . . Naw... I read Maslow's "A Theory of Human Motivation", paying close attention to every word. So, I don't have much hope that anyone who has ever gotten used to being solidly on welfare can ever make it again as something else....

. "Meh... maybe I'll just go on voting for Democrats and stay on welfare...."

 

It's why it's dangerous when 1 party has total control.
The drunken spending of the early 2000s with the addition of taking on 2 wars and cutting taxes, was way to much for our country to handle.
Especially after 20 yrs of stagnant wages and exploding personal debt.

Our gov't makes it's citizens the way they are.
All those trade agreements the R congress and Clinton did in the 90s was a major factor as well.
What did they think people would do when their jobs left the country?

 

When did they say that? Is this a fact or yet another emotional, baseless argument?

 

And savings.

 

If you live within your means you can avoid debt.

You got to live at less than your means to get savings.