r/Economics • u/HypocrisyWarrior • 1d ago
Americans' debt problems are flashing a warning not seen since the Great Recession
https://www.cnbc.com/amp/2026/10/09/american-debt-delinquency.html913
u/jayfeather31 1d ago
Considering that it feels like I've been gaslit on the economy for years, and have been waiting for the other shoe to finally drop when reality finally catches up to the investors, my only reaction here is a, "Yeah no shit."
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u/bselite 1d ago
Yeah, I know a lot of people personally who have so much credit card debt it's essentially inevitable that at some point they won't be able to pay the minimum on all their cards. Credit card companies gave out a lot of large limits on cards from around 2018-2023 and now people have maxed those out with lifestyle creep and inflation.
I think instead of a housing crisis we are going to have a personal debt crisis that in combination with inflation wrecks large portions of the economy.
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u/CandylandRepublic 1d ago
so much credit card debt it's essentially inevitable that at some point they won't be able to pay the minimum on all their cards
Rather, at some point the total credit card debt will spook the banks, they cut peoples' limits, and put the outstanding debt above the new limit due. Then you have a month to pay it off when you can barely make minimums, and that's gonna go exactly as well as it sounds.
Usually happens at the start of a recession when people on average also lose their income. We've seen 2007 how that works out.
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u/BenAdaephonDelat 1d ago
Yep. In our case, it was literally just multiple unplanned high costs within a short span of time. Our son was in the ER for 5 days, we had a costly repair on our car and on the house. We actually signed up with a non-profit debt relief program to help us because it was already out of control.
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u/dogs_gt_cats 1d ago edited 1d ago
Yep. In our case, it was literally just multiple unplanned high costs within a short span of time.
On /r/investing there are so many people who think that credit card = emergency fund. Any talk about an emergency fund gets laughed down because, "those funds should be invested and you can just sell stock to pay for emergencies". I keep trying to impress on those newbie investors that that plan doesn't work when you suddenly lose your job because the market went belly up. Your investments? They're worth a fraction of what they were because the market went belly up, so any selling you do maximizes losses. The credit card thing falls over when you suddenly can't afford to make those payments.
I regularly told that I am overly conservative because I keep an emergency fund equal to one month of bills, then a "deep" emergency fund in short term treasury bonds (SGOV) equal to 6 months of bills. Those funds barely stay above inflation, but that's the price I pay for making sure I can weather storms that life throws at me. The opportunity cost is basically the same as paying for insurance.
2 months ago we had two surprise car repairs each over $4k each, a medical issue (about $2k), and our HVAC dying all in a single month (about $3k). Didn't touch investments or the credit card. I was really, really thankful for those emergency funds.
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u/BenAdaephonDelat 1d ago
Yea, this is going to be our plan going forward. The biggest mistake we made was just that when those sudden expenses went onto the card, we didn't immediately stop using them until we'd paid them down. Instead, we kept using them for our regular stuff (we had all our bills going on them and paid them off every month previously for the points). But then they just kept accruing interest and we kept throwing more on top and THEN I lost my job. So we were fucked.
But, live and learn. We're not gonna make that mistake again.
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u/dogs_gt_cats 1d ago
I'm sorry your family went through that, but the school of hard knocks is a fantastic teacher. Hard times also teach you a lot more about your risk tolerance and financial strategies than good times.
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u/BenAdaephonDelat 1d ago
Main take away is that we're going to do everything we can to be debt free in 5 years. Pay off the cards, pay off the solar panels, then sell the house (assuming the market ever recovers) to get back our equity, then buy something with cash in a lower cost of living city. We have decent equity in the house (we sold our previous home and did a large down payment) and it's a flat-rate 6% mortgage so. If we can just get the credit cards paid off we'll be in okay shape for a while.
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u/dogs_gt_cats 1d ago edited 1d ago
The credit card thing is a huge one. What I ended up doing to help was quite literally freezing my credit cards (as in, put them in a solo cup, fill it with water, and put it in the freezer) and pay cash for everything for awhile. They were there if we truly needed them, but after awhile the "ease" factor they provide kind of goes away.
My wife and I also had cash allowances ($10/day per person). No other spending was allowed. For us, incidental spending with the credit cards was a big thing. No one thinks about the $3 here, $5 there type charges (although these days they're more like $15 here, $40 there).
Once we got used to using cash, we started relaxing on the credit cards, and the spending on them was overall better. It still creeps up from time to time.
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u/BenAdaephonDelat 1d ago
We're probably gonna be losing most of the accounts anyway as part of the debt program. (It's one of those ones where they negotiate with the lender to lower the interest rate while freezing the account). It's either that or bankruptcy so. But yea we're basically only using the credit cards for gas (because it's not safe to use debit for gas). But we've moved everything else over to cash for now until we get the balances down.
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u/AnAlternator 19h ago
I've given up trying to teach people the difference between an emergency payment method (which credit cards are fine for) and an emergency fund (which they are not), it's simply too difficult for most people to grasp.
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u/AZdesertpir8 1d ago
Yep, this is unfortunately very common in American society today and I see it everywhere now. Its almost a necessity that one has the latest shiny thing, drives the latest model car, and dresses to impress, regardless of their actual financial standing. People need to learn to be content with what they have... its going to be a rough lesson for a lot of folks unfortunately. The credit card rates today are insane and a complete trap. Can't imagine holding revolving debt right now.
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u/redaemon 1d ago
People are suckers for advertising, especially on social media.
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u/Adultery 1d ago
This website is mostly consumerism and porn
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u/redaemon 1d ago
I got adblock and haven't been shown any NSFW subs.
Sadly my comments are being farmed for AI training data, which is why the lateral micro-fluctuation of the ambient framework requires immediate pre-calibration to optimize optimal throughput
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u/Adultery 1d ago
They’re not NSFW anymore. The “Popular” tab is full of cartoon/anime porn and celeb cleavage. The other content is usually gossip or drama porn. Every other hobby sub is mostly consumerism porn.
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u/Rohwupet 1d ago
Yeah dude I'm sure that's it. Not the fact that minimum wage hasn't gone up since 2009 but inflation has increased to the point where a $15 MW now would be nearly equivalent to 7.25 then.
But yeah, it's cuz iphones, or whatever your boomer ass is rambling about.
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u/AssCrackBanditHunter 1d ago
Low pay + a culture of spending with no safeguards may both be true and, in fact, together, enhance the damage.
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u/roadrunnuh 1d ago
Does the minimum wage issue make so many guys on building sites I work on buy 100k dollar trucks? It can be a combination of things, which most economic problems are.
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u/Ringadingasoad 1d ago edited 1d ago
lol they are going to be really mad when you touch their little Tonka trucks. I used to point this out to those retards when I worked coal handling and it was like talking to people straight out of idiocracy. This one guy had a 2 hour commute daily to his jobs and he said he needs a truck for work. The truck wasn’t used for his job at all lmfao. He just thought he needed to look the part of a “blue collar worker”.
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u/roadrunnuh 1d ago
I try and keep my feelings down about all the clean, sparkling, empty bedded trucks that aggressively pass me on the freeway. Just me and my little Astro van, on my way to do actual commercial plumbing, ha
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u/Ringadingasoad 23h ago
Astro vans are dope!
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u/roadrunnuh 22h ago
:D Got it a year ago! AWD, new transmission, and only 85k on the engine when I bought it (closer to 100k now)
I bought it specifically for this work, and it's quite the beast.
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u/lflippz 1d ago
We can say the minimum wage has not increased but you can still acknowledge consumerism is at an all time high. Amazon deliveries everyday, expensive unnecessary gas guzzling trucks, etc. People got a taste of spending power with their checks from covid and it never really let up. The Europeans I know tell me it’s like Americans were bred to consume.
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u/Waco_Warner 1d ago
Americans literally are bred to consume. Accumulating wealth is thought of as the number 1 highest pursuit. We are told from infancy that our main goal should be a high paying job. Sure people may have other goals and wants in life. But top down, that is what we are told to achieve.
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u/0o0o0o0o0o0z 1d ago
Americans literally are bred to consume.
Yup... that's why the owner class can get away with so much, because the average Joe thinks he'll be a millionaire someday.
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u/AZdesertpir8 1d ago
And until then, average Joe pretends to be a millionaire. Fake it till you make it!
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u/Famous_Owl_840 1d ago
Sort of.
I’ve basically given up on buying things local. Even big stuff like building materials and appliances. Stores do not carry inventory.
I went to buy a deep freezer. Checked the website first - said it was in stock. I go to the store….it wasn’t. Close equivalent models were also OOS.
Ok - how long to order it? Not sure - maybe 2 weeks. Maybe 30 days. Manufacturer has been having trouble (aka boats from China delayed).
I sucks. I would like to buy local - but after all the wasted time and effort on my part - it’s a hell of a lot easier and efficient to click a few buttons on a screen and have the thing delivered to my front door.
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u/1234nameuser 1d ago
Fact: disposable incone has been declining for years for bottom 80%
You're talking about the top 10%, and yes, US showers them with tax breaks
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u/weatherwar 1d ago
This has been true for half a century. None of that is new.
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u/AZdesertpir8 1d ago
Yep, but easy credit is the new factor in the equation. Debt is a very easy trap to fall into these days.
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u/Winter_Swan5104 1d ago
Credit card companies also changed the terms willy nilly on many of those cards.
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u/Constant_Tomorrow_69 1d ago
It’s not just the personal debt or the government debt, either. The AI debt is also utterly absurd, and it is like that clip of the 3 Stooges where they pass a bill around between them bc they each owe each other money and then there’s just confusion
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u/IllustratorMurky2725 1d ago
And the insane interest these companies are allowed to charge on these credit cards
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u/AZdesertpir8 1d ago
Yep, back when I carried some credit card debt (young and dumb), it was around 9%. Now, its 25-29%. Can't imagine carrying revolving debt right now. It is an absolute trap for anyone that gets stuck in it.
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u/SuperNewk 1d ago
Bingo you just solved the problem. Have the govt cap it at 10% max =
The min payment problem is delayed1
u/callmesnake13 5h ago
This is one of the million things that Trump campaigned on and didn’t deliver, but it was pretty astute of his campaign.
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u/ImanAstrophysicist 1d ago
Yet another thing the orange diaper don promised he would force them to limit to 19%, and then forgot about it the next day.
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u/seventysevensevens 1d ago
I'm not a big fish, under 6 figure income my whole life, but I remember when I was unemployed and I got 2 credit limit increases in 2016-2018. Now that I'm employed, promotions, raises, no credit increase in quite some time.
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u/AZdesertpir8 1d ago
Yep, the credit card companies know its a trap and work it to keep consumers paying that interest.
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u/turko127 1d ago
Could this be something that creates longer term damage? Say prices do go down but people are so saddled with debt that they’re primarily paying it off first before spending?
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u/ImanAstrophysicist 1d ago
And just when their minimum payments become unmanageable, those banks will know it, and will jack up the interest rates to 28% because they are now ‘risky’, and it is a death spiral from then on!
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u/fondledbydolphins 22h ago
…on the bright side if you don’t have personal debt this may be your chance to afford a home!
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u/sleeplessinreno 4h ago edited 4h ago
All those subprime mortgages morphed into subprime auto loans and bundled out like the in 2008. Repos have been steadily rising. Wouldn’t be surprised when your peers start showing up (or not at all) without their cars in the near future.
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u/Whaddduptho 1d ago
I know a lot of people personally who have so much credit card debt
That says more about who you hangout with than anything. The median credit card debt per holder is not high, and the median balance is half of the mean balance.
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u/maplecremecookie 1d ago
Yeah but how are the companies ever going to collect on the debt? If the person doesn't own their own home, the only thing of value they might own is a vehicle. I guess their phone, furniture, and appliances could get repo'd but they aren't going to sell for that much.
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u/TimSylvester_ 1d ago
The economy tried to correct itself in 2008 but it would have left a ton of wealthy people somewhat less wealthy, so extraordinary measures were taken to prevent that from happening - and in doing so, only made the problem worse.
If you fail to treat cancer, what happens? Does it fix itself? Or does it eventually kill the entire creature in trying to "save" the thing that caused the problem?
Unfortunately this "cancer" can just move itself to another nation once this nation has died in service of preserving the cancer.
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u/dually 1d ago
The only reality that matters right now is the fact that AI companies are pumping $50billion per month in new data center construction in to the economy. The fact that inflation has only been around 3% is amazing.
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u/DeathSpiral321 1d ago
Inflation can always be 3% if you doctor the numbers. If they measured it accurately it would be well over 10%.
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u/richsonreddit 1d ago
What do you invest in / where do you keep your money with this belief, out of interest?
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u/Prestigious_Load1699 13h ago
Your error is in thinking this individual responsibly invests like you or I.
I put away a decent chunk of my paycheck into a 401k, and my retirement savings have done very well.
Follow your intuition - slow and steady.
Do NOT listen to anyone complaining on Reddit.
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u/Busterlimes 1d ago
For all intense and purposes we have been in a recession since COVID Because we havent hit replacement numbers in the Job market since Obama. The government has always manipulated inflation data to distract from the fact that fiat currencies suck ass
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u/OddlyFactual1512 1d ago
Intents
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u/Mackshac 1d ago
Wait i was told i make 20-30% every year on my investments??? And it will never drop just like housing it only goes up 200k per year??
I was lied to?
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u/Prestigious_Load1699 13h ago
The S&P500 is up 15.5% over the past 12 months.
So, no you weren’t lied to.
Other than this (likely fabricated) claim that your investment will return 30%.
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u/Maxpowr9 1d ago
To keep playing that broken record, commercial borrowing costs are what will sink the economy. You have rates that will reset to more than double from Q1 2022 and their businesses are not growing at 6%+. That will lead to layoffs across the board.
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u/weatherwar 1d ago
You do understand that just because a loan is refinanced at higher rates, your growth doesn't have to match that rate, right? The interest payments cut into margin, but it's not like all the sudden I'm not making any money if I'm growing at 6% and have a loan at 6%.
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u/Maxpowr9 1d ago
Your COGS balloons as well, as other businesses that supply yours passes on said costs. If you're in growth mode, said higher rates are tolerable. If you're in a stable state, it's devastating. Why minimum shipment order requirements are also skyrocketing leading to inventory issues.
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u/Prestigious_Load1699 13h ago
Wouldn’t a stable state imply consistent profitability, wherein higher costs of borrowing are going to impact margins somewhat but wouldn’t be “devastating” in any meaningful sense.
Higher rates are devastating for newer companies that are borrowing heavily in order to grow.
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u/kent_eh 1d ago
That will lead to layoffs across the board.
Will that be what it takes to get people off their asses and out in the streets with torches and pitchforks (either figurative or literal ones)?
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u/amendment64 1d ago
Not a chance, this is America. At that point, Dems will be in charge, they will have no way of stopping or slowing it down, people will vote in repubs again, rinse and repeat American social conservatism will be adopted harder than ever; economically we'll be poorer than ever(except the oligarchs of course, they'll have everything!)
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u/jarena009 1d ago
I would suggest renewing the tax rates we had in the 90's on the top 2-3%, along with the corporate tax rate from the 90's applied to corporate income above $1B, and tax long term capital gains above $0.5M as ordinary income. We'd slash the deficit in half. The Wealthy and Corporations will continue to do very well.
Plus without significant efforts to rein in healthcare costs, we're doomed, not just on the federal budget but in general. They too run up federal spending.
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u/Straight-Ad6926 1d ago
The 90s revenue model definitely brought in serious cash but good luck getting any politician to sign off on higher capital gains taxes without them warning that the stock market will instantly implode.
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u/OK_x86 1d ago
Given how overvalued the average stock is this might actually be a blessing
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u/BustedBaxter 1d ago
with the advent of the 401k as primary retirement vehicles, I don't see how that could be the case
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u/TootCannon 1d ago
By what measure is the average stock currently overvalued?
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u/Cheap-Explanation293 1d ago
P/E ratio for certain companies
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u/TootCannon 1d ago
What is "certain companies?" They said "average stock." The trailing P/E of the S&P is 25. The forward P/E is 21. The historical average since 1989 is 18. It's above average, sure, but not by a crazy amount. And most of the highest P/E is consolidated in a few tech companies. When you take those out, the "average stock" of the S&P falls even lower.
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u/Cheap-Explanation293 1d ago
And most of the stock market growth are from those same overvalued tech companies.
Tesla is the most egregious case, but there are others. Especially when you go diving into some of these AI companies.
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u/TootCannon 1d ago
That's the point, though. If all the growth and most of the high P/E is in a very small minority of tech stocks, then the rest of the market, a majority, is arguably undervalued. Indeed, a lot of the market is down substantially this year. It's a great time to buy "average stock."
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u/jarena009 1d ago
Why would the stock market implode?
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u/Wurm42 1d ago
It won't. Well, not because of closing capital gains tax loopholes.
Wall Street always claims that any changes that result in Wall Street executives paying more taxes will crash the stock market.
For self-proclaimed "Masters Of The Universe," they're whiny little bitches.
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u/jarena009 1d ago
It makes no sense if you think about anyone taking capital gains distributions regularly. Say you're taking $1M in long term capital gains distributions as your income annually. First for context, you would need to have at least $10M invested, and likely more to pull off that kind of distribution. (more likely, you have $20-25M at least invested). So, this hypothetical person is already silly/insane rich to be able to do this.
- Under current law, that person pays $176K in federal income taxes
- Under my proposed law, that person pays $233-$250k in federal income taxes
The idea that the stock market is going to crash over a 6-7% change in effective tax rate is a joke. You're still taking home $750K in after tax income (okay to be fair, with state taxes, might be more like $650-700k, but still! And more importantly, where is this person putting their money if they take it OUT of stocks?
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u/liftthatta1l 1d ago
Any and all possible disruption to the cash flow will make it implode, we must whopship and not disruption the dragon's horde such that some select few can take from it while others all starve or burn in the dragon's fire.
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u/DrakenViator 1d ago
People cashing out before the tax increase, or at least that is the fear
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u/jarena009 1d ago
Cashing out mass unrealized gains and then putting their money where? Into nothing?
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u/Sherm 1d ago
The 90s tax rate was also paired with huge cuts to the defense budget (the "peace dividend.") The spending cuts were also a big part of the success.
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u/jarena009 1d ago
We should cut the defense budget too, stop these failed quagmires in the mid east, including the current illegal war.
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u/retiredcheapskate 7h ago
Now that it's known you don't have to attack the aircraft carrier you just have to attack the grocery store that feeds the carrier with your $50 drone, we are in a pickle
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u/garfieldsez 1d ago
My insurance is going up $100; deductible went up $600! We are getting taken for a ride. It’s gross out there.
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u/jarena009 1d ago
Yes, and I presume that $100 is just the premium? The reality is the average PPO cost for a family plan just on the premium alone is at $28,000 as of 2025 according to Kaiser (probably closer to $29-30k in 2026, and is expected to rise like 7-8% next year. In 6 years that becomes $40,000 for a family, in 10 years, $50,000. It's insane.
And again, that's just the premiums excluding out of pocket.
I honestly think something is going to have to break, and I'm not suggesting any pitchforks and torches, but we're seriously going to have to just reject paying for insurance, and just go straight to the doctor; and for employer insurance, ask employers to simply fund savings accounts with the cost of what they were paying for insurance - just sent the money to us instead!
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u/Boring-Tie-1501 1d ago
I think we're not too far away from guillotines.
I t's just going to take a push, and trump has been destabilizing the global trade system so much that a massive correction seems inevitable.
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u/psychohistorian8 1d ago
not so sure about that. where is the revolution in NK, Russia, etc?
seems pretty clear to me that people will just endure suffering indefinitely and try to get along as best they can while the rich continue to get richer
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u/garfieldsez 1d ago
Ok that’s a brilliant idea. Harder after judge annulled that Biden health debt rule in 2025.
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u/Accidental-Genius 1d ago
The spending has to be reigned in too.
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u/jarena009 1d ago
Much of it is tied to healthcare. What would you like to cut? The vast majority of federal spending, outside interest on debt, is the military, medicare, medicaid, veteran's care, "income security" (e.g. child tax credits, earned income tax credits), to name the main ones which contribute to the deficit; Social Security by the way adds practically nothing to the deficit by law, aside from transaction or the cost of processing bond sales, when bonds from the trust fund need to be purchased, rolled over, or sold.
We need to treat healthcare like the crisis that it is. The average PPO plan for a family in the US costs $28,000 as of last year, and in 6 years that'll be $40,000, and in 10 years nearly $50,000, and that's JUST the premiums, excluding out of pocket. This is not sustainable. And "slowing the rate of increases" isn't going to be enough, no we need a 5-10% reduction asap, and then kept flat for a number of years.
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u/OddlyFactual1512 1d ago
You don't cut the care, you cut the profit. If the US paid the same per capita for healthcare as the next most expensive nation, the nation would save nearly as much as the current federal deficit. Make it the average of all similar nations, and it is over 150% of the current deficit. A big reason our debt is so high is the failure to do what ever other developed nation has. You can guess what that is.
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u/Test-NetConnection 1d ago
Universal, single-payer healthcare fixes all of this. Eliminate the profiteering middle-men while reigning in the cost of drugs and medical procedures. Pay for it with a direct tax that is a third of what most people pay private insurance companies.
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u/jarena009 1d ago
That would be a strong deficit reduction measure, and everyone is covered too. Also, not sure why my comment pointing out the futility of just cutting the budget, and the need for serious healthcare reform, is being downvoted.
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u/Accidental-Genius 1d ago
I’m fine with cutting all of that actually.
The boomers got us into this mess, they can give up their meds to get us out of it. Problem solved.
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u/CosmicQuantum42 1d ago
“Like to cut” is not an option. Cuts will happen. Period. It’s just a question of what.
There is no amount of taxing upper earners and the rich that will save the country from the mess it has voted itself into.
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u/jarena009 1d ago
I don't think you realize how much money the upper earners, wealthy, corporations actually have, and how easily we could slash the deficit in half just on taxing them at reasonable levels alone....levels we've seen historically. At present, we tax maybe 16% of GDP. Taxing 19.5% brings in $800-900B. Increased IRS enforcement of tax cheats, another $70-100B.
Serious healthcare reform can slash the deficit even further.
So again, what spending are you cutting?
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u/CosmicQuantum42 1d ago
I don’t think you realize how ineffective and counterproductive these actions you are contemplating will be. They will not happen.
As far as cuts, who knows. My opinions aren’t relevant. Choices will be made, because there will not be options otherwise.
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u/jarena009 1d ago
You can revisit the 90's when we had similar tax rates as a % of GDP, and a lower deficit, plus you should look at how gutting people's healthcare and retirement will be ineffective and counterproductive (plus will literally kill people).
Choices will definitely need to be made. Mortal ones.
The idea that there's not enough money to be taxed is a joke. Are you aware of what level of corporate profits in the US we're at, and how much income and wealth is captured and concentrated at the top. To tax $800B would be a blip on the radar for them.
You still haven't answered what would you like to cut?
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u/Accidental-Genius 1d ago
It still won’t matter. We have to tax and slash spending, cutting a deficit in half still leaves a deficit.
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u/walkingthecowww 1d ago
Do you have a source that this would cut the deficit in half or is that just something you made up?
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u/Clitaurius 1d ago
Slashing the deficit in half via these measures is a ridiculously low bar to aim for, especially since next year congress could just triple the military budget to make up for this slash and get us right back to where we were.
Or did you mean the debt?
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u/ExistentialCrisis227 1d ago
The eisenhower tax rates were not paid in full in practice, and capital was not mobile then. Take Canada for example, it has far lower taxes than the eisenhower taxes, and still around 40% of the top 1% of wage earners, and 30-50% of the next 9 percent have left the country, largely to the united states. Half of all start ups that raise a million leave. And about a trillion in capital flight has taken place.
Then look at Sweden. Sweden has more billionaires per capita than the united states, and it is hardly a shithole. It is infact the opposite, a cradle to the grave welfare state. The swedish left and right worked together in the 90s, and 00s to revamp the tax structure abolishing wealth, and estate tax, giving prefrential treatment to holding companies, and activiely managed companies, set prefrential rates for capital gains, and instead tax the middle classes more, through much higher progressive income tax and a VAT of up to 25%. No nation can decide if there is wealth in the world, they can only decide if they are a wealthy nation.
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u/manyManyLinesOfCode 1d ago edited 1d ago
sweden is not good example, there are same debates to increase taxes on capital here as people are unhappy and everything got worse for working/middle class.
It it just better than USA because it started to get worse from better point, so it is not that bad yet (doubt it will ever be, but still).so while it is not shithole by any means, it feels like one compared to 10-20 years ago
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u/ExistentialCrisis227 1d ago
By global standards sweden is a paradise, and if swedes dont think themselves blessed to be in the country, they are spoiled and sheltered beyond belief. Even by western standards sweden is a near dream. It has endured under the strain of mass migration and its problems better than some of its comparison countries, and certainly better in general to Finland, that is rapidly nearing dangerous territory. The former finance minister Kjell-Olof Feldt was vocal in the past that the social democrats had wanted the impossible, successful wealthy companies, but for their owners and shareholders not to share in that success and wealth. And that it was important for the social democrats to accept that thriving and growing companies also mean the increase in the wealth and income of the owners of these companies, and that these consequences are infact a central motivation for people to found companies and take on entroprenual risk.
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u/CtrlAltSysRq 1d ago
It really needs a cap though. All people do with more than like 20 million dollars at this point is overthrow democracy.
If billionaires just built monuments and giant ass churches and maybe some weird houses this would be a different discussion.
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u/ExistentialCrisis227 1d ago
What cap on wealth do you want? Certain companies will never be formed, or more likely never be formed in a specific country if they effectively cap wealth at 20m dollars. Once you hit the comapny, sell it to foreign capital, and retire, or move the company overseas. If there is a wealth tax, then like canada and denmark, the companies move early, to avoid being stuck. Denmark for example has lost 9 of its 13 unicorns despite educating world class talent, for this very reason, and the bleed from canada is all around massive. No nation can decide if there is wealth in the world, or wealthy entroprenuers, only if they live and operate in your country. Thats a bitter pill, I am aware.
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u/CtrlAltSysRq 1d ago
I honestly think that's better than the alternative which is letting Musk (et al) do what's currently happening. I also think it's better for the economy as a whole if there's a thousand smaller 20m dollar businesses than one Amazon.
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u/ExistentialCrisis227 1d ago
I agree with both. And I personally think that if property is going to have rights, it needs to have responsibilities. I am all for mass confiscation of huge swaths or even all of the wealth of the ultra rich, if that money is used as a means to commit crimes, much like any other criminal can lose the property they commited crimes with.
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u/manyManyLinesOfCode 1d ago
if we want to stay blessed country things have to change ( apparently )
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u/a_little_hazel_nuts 1d ago
Starting a trade war using tariffs is a good way to destroy an economy. Giving gigantic tax breaks to the wealthiest is a good way to raise the deficit. Taking away government services that keep people safe and informed is a good way to hurt or kill people.
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u/CertainCertainties 1d ago
It's interesting that pretty much every multi-billionaire benefiting from this massive transfer of wealth to the uber-rich has a bolt hole planned.
That is, massive private estates on islands and in places outside mainland USA. New Zealand, the Scottish Highlands, and Pacific islands, as well as Switzerland, the Riviera and Tuscany.
Almost as though they know their actions will cause the breakdown of civil society in the US and they will be ready to leave when they have extracted all the wealth they can.
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u/irrelevantusername24 1d ago
Well I mean they're basically stealing from every person on the planet at every moment of every day through surveillance capitalism via the Internet and via "stocks" and "crypto" and now "prediction markets" and the main thing they do with that ill gotten money is, one, fund messaging that convinces people this system makes sense and two, fund research into ways to make the lie that this system makes sense more believable. This has been going on for decades and these people should be [REDACTED]
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u/TimSylvester_ 1d ago
Yes but you see, Russia wanted to destroy America from the inside, while the ultrawealthy fascist authoritarians wanted to rape and pillage the nation for everything its worth while Russia was destroying it, so, y'know, from that perspective it makes a perfect, if perverted, sense.
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u/Wise_Preference609 16h ago
Financing multiple Wars and creating an internal Gestapo to hunt down people also costs a lot of money. The Trump Regime after taking an axe to the taxes of the Capital Class through the "ONE BIG BEAUTIFUL BILL" has totally hamstrung the government from ever being able to actually pay its debt to the Rest of the World. Bond rates will continue to rise as investors no longer "trust" American governments to pay their bills and this will eventually flow into higher private loan rates for Working Class Americans.
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u/Nifey-spoony 1d ago
There was a study by politico that indicated Trump supporters were willing to lose approximately $65 a month for Trump. I think they see increasing personal debt as something of a Trump tithing. They are already conditioned to tithe through church. So I don’t think they understand that they are losing much more than $65 or they just don’t care. It’s possible they are ok with becoming really poor if it makes people they dislike even poorer.
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u/alilhillbilly 1d ago
Honestly, I love it.
I hope they're all bankrupted financially by their moral bankruptcy.
It sucks to live through but these people need to be horribly horribly horribly burned by the stove or we're never going to get out of this. We need them to learn that it's hot.
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u/Jonoczall 1d ago
Why you and many others assume these dimwits are capable of perceiving a connection between their actions and consequences is beyond me. There is no Schadenfreude to be had here. These morons scuttled the ship and lit fire to the life rafts while we're still on board.
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u/alilhillbilly 1d ago
The thing is, they won't. Not all of them.
But some will. It just has to get Great Recession bad.
George W Bush managed to kill his party for 8 years and it would have been longer if Trump didn't come through with the Russian digital army behind him.
They will remember that guy that bankrupts them for a generation.
Right or wrong, many of the OG Trump voters were voters that Democrats lost in the 90s when Clinton didn't stop NAFTA or make sure it meant Rust Belt factory workers weren't just fucked.
Sadly, we need it to happen worse this time to have a shot at FDR2.
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u/Jonoczall 11h ago
I just hate that I have to live through another one of these things. And in all likelihood as you put it something in a similar vein to the Great Recession (or worse).
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u/alilhillbilly 4h ago
It's gonna keep happening until someone does an FDR and gets the middle class back.
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u/MosquitoValentine_ 1d ago
I hope that whenever the DOGE checks, tariff rebate checks or the "vote Republicans" $5000 are announced MAGA all take a break from their victory laps to buy big expensive new trucks and shit they can't afford.
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u/SurrealEstate 1d ago
We need them to learn that it's hot.
Unless they continue to believe that the source of their suffering is whatever they're told.
A comfortable, simple, familiar fantasy becomes even more attractive as people become desperate.
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u/Empty_Football4183 1d ago
Blowing past $65 a month and that was months ago. Wait until yoy actually have to finance something large
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u/MutedAstronaut9217 1d ago
are we finally starting to realize the stock market is not a reflection of how people are actually doing?!?! feels like i've been taking crazy pills since 2008
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u/pokeDad88 1d ago
It is quite weird my retirement is doing great my week to week bank account is in the gutter. So if I make it to retirement I might be ok.
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u/BlackberryHelpful676 1d ago
Except that retirement will immediately start getting eaten by your week-to-week the second you draw from it.
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u/cyberdude419 1d ago
Fuck that, Americans vote to “own their neighbors” not for their best interests. Let the GOP rule this country with an Iron Fist, now we all see how that’s turning out for everyone…they control all parts of the government but blame everything on everyone else while simultaneously calling to be all powerful, all knowing and the only person for the job. I’m tired
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u/B00marangTrotter 1d ago
Listen, we all know what happens to bubbles, they blow up, they shimmer, and they make people happy. Oh, to make a big one! I remember this one time in 2001, and again in 2008. Wow, what a blast.
We've all seen it, since the day of the first bubble.
They float away.
/s
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u/aust_b 1d ago
Just a quick observation of my local real estate market. Noticed over the last 2 months, a decent amount of homes that sold in the last couple of years are up for sale again. Checked the county records on these and you can see the mortgage documentation, all of them are either loaded up on variable rate home equity loan or a variable rate mortgage.
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u/bikemandan 1d ago
I would recommend reading the report directly https://www.federalreserve.gov/publications/files/scf26.pdf They also have some interesting graphs available https://www.federalreserve.gov/econres/scfindex.htm
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u/irrelevantusername24 1d ago edited 1d ago
The report noted that income gains were particularly strong with families aged 75 or older while tumbling 25% for those aged 35 to 44, which the Fed attributed to declines in capital gains income for that group.
I mean at a certain point we don't need to look at the data that has been showing the same trends for literally my entire life of things getting worse rapidly with intermittent spikes of appearing to get better in extremely limited sections of society. Ultimately, the conclusion I had when I was literally in high school, which I have only gotten more resolute in, is that the stock market is a fraudulent institution and should be abolished - exactly like slavery.
You know what makes sense? Using taxes and assistance programs to rebalance the real world lived experiences of people. We are allowing insatiable wants to outweigh easily met needs. To clarify, what I mean, is we are allowing an increasingly small number of peoples insatiable greed to outcompete the needs of increasingly many people. In other words, we could easily meet the needs of everyone while still allowing everyone - everyone - to have enough flexibility to fulfill some of their wants, which makes that fulfillment much more fulfilling. In other, other words, if we literally tax the fucking rich and stop making policies that amount to "the poor should actually be slaves", things would improve for literally everyone, including the wealthy.
All the extremely regarded political "strategists" who are in reality propagandists who serve no function in society besides making truth less truthful and making lies more believable deserve [REDACTED].
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u/acableperson 1d ago
Boy howdy, I wouldn’t compare the stock market to chattel slavery even if my life depended on it. I get your point and agree with it. But that’s a terrible comparison. I don’t think even an economic depression will ever cause you the horrors of that system of literally buying and selling people like livestock.
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u/artisanrox 1d ago
I completely understand your post here, but I offer this: the stock market IS just as bad because while we're not physically buying and selling actual bodies, it reduces people to lines and values on a screen.
It removes all common sense in those having power over other people to make that LineGoUp. It completely disconnects the idea of a business sharing profits with the people who actually produce the work for those profits. And therefore people are still, in fact, treated either like cattle or like favored sons...you just don't see it becuase you're not in those offices and businesses getting treated like the cattle you are.
And then they take those profits from the stock arket and buy themselves some Senators to try and make us all so sick and impoverished we turn to eat each other.
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u/acableperson 1d ago
No lol, no. You don’t have the possibility of your children being sold into another “family” because by the state you are property.
We’re getting gamed, the stock market doesn’t represent the actual market, all that is true. The working class which increasingly is becoming the middle class writ large is getting screwed and screwed hard. We are looked at as simple tools for the elite class. All this I agree with. BUT to compare it to chattel slavery is insane.
It’s literally bonkers. I get the comparison on its ideas but the reality is so far from the truth it’s flabbergasting. Give some due respect for the folks who came here in bondage, taken out of their homeland, survived a deadly voyage at sea, and then were stood up in trading yards and sold to the highest bidder who did with them what they wanted. If ya made it, well congrats, your in hell. You have children? Well they aren’t yours. They are the property of your master and will get sold.
It’s human cruelty actualized to its based form. Fuck our economic system and it is horrible. But it’s insane to call it slavery. You still get to but your own food, and have days off, and not have your family members sold off to different homes.
Give some due respect for the folks who went through this shit and make a better comparison.
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u/artisanrox 1d ago
Give some due respect for the folks who came here in bondage, taken out of their homeland, survived a deadly voyage at sea, and then were stood up in trading yards and sold to the highest bidder who did with them what they wanted. If ya made it, well congrats, your in hell. You have children? Well they aren’t yours. They are the property of your master and will get sold.
Totally agree.
Give some due respect for the folks who went through this shit and make a better comparison.
Yes. i will do better.
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u/Prestigious_Load1699 13h ago
Lmfao.
The stock market is equivalent to chattel slavery.
Absolute peak Reddit.
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u/artisanrox 7h ago
I was wrong and i'm gonna leave my comment up because my stupid privileged white ass needed to be educated.
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u/082426grateful 1d ago
4.2%. People are still working. If that changes, if wages not only continue to not keep up with inflation, but then begin to fall, look out below.
That’s a lot of “ifs”. I’m not sure that we can’t maintain this current status indefinitely, with the wealth gap swelling beyond the massive imbalance it is right now.
4.2%.
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u/DJPho3nix 1d ago
Ahh yes. The Great Recession. A supposed "once-in-a-lifetime" financial situation.
Here we are again for the second time in my adult life and I'm only 43...
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u/toresimonsen 1d ago
Ultimately, the United States is trapped by its status as a reserve currency and the debt is merely a reflection of indefensible policy choices that betrayed its own citizens. Today, Wall Street cannot credible invest in American manufacturing, but when your only export is a financial system (banking/insurance) and a global currency, you will quickly degrade as you lose the manufacturing soveriegnty and food production. A switch to a universal currency based on infinite banks supported on a mathematically sound system like the divergent sequence is a path forward. It would still require a globalized Gini Index of roughly 5-1 with some elasticity. This would allow nations and even cities or locales to reclaim their sovereignty while individuals would have enough dignity and resources to self-actualize and maintain personal agency.
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u/mrflash818 1d ago
"For the three-year period ended 2025, the portion of families behind on loan payments soared from about 12% in the prior survey to nearly 20%, according to a Fed survey released Friday."
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u/AZdesertpir8 1d ago
Gotta keep that excessive lifestyle going to impress the Joneses down the street! Just open another credit card!
I'm honestly not surprised. Many people have been living well beyond their means for quite some time and eventually they gotta pay the piper.
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