The Washington Post republished an article on August 31 entitled “Credit Card Debt at $1 Trillion Is a Sign of Consumer Strength” written by Karl W. Smith of Bloomberg Opinion (paywall). Unlike the Post article, which had no subtitle, Bloomberg, a corporate partner of the Post since 2010, had a lengthy one.
It cheerfully and optimistically stated, “Americans tend to borrow when they are feeling good about their jobs and personal finances, not when they are feeling strapped.”
In my opinion, the titles of the two articles, which are identical, defy common sense; the subtitle of the Bloomberg article is problematic. However, what is especially disturbing about the Post article is that it was reported as news (see “Business” section label) while the Bloomberg one was clearly reported as opinion (paywall).
The Washington Post needs to follow the extensive and detailed guidelines of The Wall Street Journal, which wisely differentiates between news and opinion. After all, newspapers are the first draft of history, and democracy dies in darkness.
I believe that an all-time high credit card debt of $1 trillion is not a sign of consumer strength but of quiet desperation, especially when that debt has “an average interest rate of 20.6%.” Borrowing at such a high interest rate or even higher tells me that American consumers are “feeling strapped” much more than they are “feeling good about their jobs and personal finances.”
It tells me that credit cards are most likely being used to pay off such weekly or monthly expenses as groceries, electric bills, cable tv, internet and gasoline to name just a few. It also tells me that this debt along with the “record or near-record high balances” is probably not being paid off beyond the minimum due or perhaps on time because of “forty-year high inflation” and stagnant incomes.
In plain words, the average affluent American, who typically has four credit cards, is most likely redlining his or her household budget every month, and not purchasing such big-ticket items as Teslas, luxury boats or homes financed by bank loans and cash. An increased purchase of more big-ticket items would convince me that Americans indeed “are feeling good about their jobs and personal finances.”
The Washington Post and Bloomberg have confused credit card debt with big-ticket item debt in supporting Biden’s failed economic policies of massive deficit spending and the printing of trillions of dollars.
Middle-income and upper-middle Americans greatly need their credit cards to pay their myriad of basic household bills, and survive another sixteen months of dubious and inflationary Bidenomics.
According to the U.S. Debt Clock website, our credit card debt is presently $1.26 trillion (“Unfunded Debt/Interest” tab) and not $1 trillion. I wonder what it will be during the next presidential inauguration at the U.S. Capitol on January 20, 2025? I suspect that our credit card debt will be a lot higher along with our national debt, which is now over $33 trillion, and projected to be nearly $45 trillion by September 2027.
And it gets much worse after that date.
I fully agree with Ambrosia Parsley, who unreservedly wrote three weeks ago in the Comments section of The Washington Post article, that “You’re out of your mind if you think credit card debt is a sign of consumer strength. People can’t afford to live so they’re putting it on the [sic] credit card. What kind of tone deaf [sic] corporate bs is this?”
It is the “tone-deaf corporate bs” advocated by the transplanted swamp creature and Post owner Jeff Bezos and most overpaid federal bureaucrats, who all favor a second presidential term for Biden. That’s who.
Unfortunately, the Post will not allow any more comments to this article, but I gave Ms. Parsley along with the other two comments a blue thumbs-up last Thursday just in the nick of time.
– Robert L. Maronic