Tuesday, October 30, 2007

Americans Owe $915 Billion in Credit Card Debt

Americans have record credit-card debt and banks are starting to sweat an uptick in default rates, reports Fortune's Peter Gumbel. Why some fear this could be the next subprime.

Do you still beleive there is an American midle class or has that been replaced by the working poor using credit to live a middle class lifestyle? This is a ticking time bomb waiting to explode.


Dennis Moroney, an analyst at TowerGroup, expects credit card delinquencies will rise as consumers, who have until now used home-equity lines of credit to pay off their cards, start ratcheting up higher card debt. When housing prices were rising, it was easy for consumers to tap the escalating values of their homes to keep borrowing. With the home-equity spigot turned off, over-leveraged consumers may have trouble keeping up with payments.

This is the result of trickle down economics. Much like only a trickle of water will eventually make you die of thirst, the voodoo economics of the Republican party have killed the American middle class.

1 comment:

Anonymous said...

The American public has had its head in the sand, resolutely refusing to see the signs that our country is losing the advantages that had previously made our economy so resilient. We have gone from having boundless wealth to owing foreigners $9 trillion. We have lost much of our technical lead. We have lost our manufacturing base. We can no longer afford to shoot ourselves in the foot by encouraging companies to move jobs abroad, and we cannot afford to perpetuate the middle class income stagnation that has already persisted for 30 years. A big practical step for reversing this tide is outlined at www.sharedeconomicgrowth.org. I urge you to check out the site, and to help spread the word on this simple, highly feasible step towards fiscal sanity and fairness.