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Total US debt soars to nearly $60 trn, foreshadows
new recession
Published time: June 16, 2014 23:15
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Government Spending, USA
America - its government, businesses, and people - are
nearly $60 trillion in debt, according to the latest economic
data from thethe St. Louis Federal Reserve. And private debt
- not government borrowing - is the biggest reason for the huge deficit.
Total US debt at the end of the first quarter of 2014, on March 31 totaled almost $59.4 trillion -
up nearly $500 billion from the end of the fourth quarter of 2013, according to the data. Total
debt (the combination of government, business, mortgage, and consumer debt) was $2.2 trillion
40 years ago.
In 50 short years, debt has gone from being a luxury for a few to a convenience for many to an
addiction for most to a disease for all, James Butler wrote in an Independent Voters Network
(IVN) op-ed. It is a virus that has spread to every aspect of our economy, from a consumer using a
Reuters/Lee Jae-Won
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credit card to buy a $0.75 candy bar in a vending machine to a government borrowing $17 trillion
to keep the lights on.
According to a 2012 study published in the Economist, rapid growth in private debt is a better
predictor of recessions than increases in public debt, growth in money supply, or trade
imbalances. Consumer credit in the US rose by 22 percent over the last three years, reaching a
record-high $3.18 trillion in April, the Fed reported on Friday.
Credit card use (or revolving credit) rose by $8.8 billion, while non-revolving credit like auto
loans and student loans made by the government surged up by $18 billion in April. Non-
Delinquent US student loans hit
record high, with over $100 billion
past due 35
Ceiling suspended: US takes on
$300bn in new debt after hitting
$16.7 trillion 90
revolving credit jumped by 8.2 percent over the last year, while revolving credit only rose 2.2
percent over the same time period.
For a while after the recession it was trendy to cut up your credit cards and get out of debt,
Michael Snyder wrote in an InfoWars op-ed. But that fad wore off rather quickly, didnt it?
Snyder noted that 56 percent of all Americans have a subprime credit rating, and that the
average monthly car payment in the US is $474. He added that 52 percent of homeowners are
overextended on their mortgages and cannot even afford the house that they are living in right
now.
Debt is hurting young adults the most. Millennials say they are spending at least half their
monthly paychecks on paying off debt, a recent Wells Fargo survey found. And two years out of
college, half of all graduates are still relying on their parents or other family members for some
sort of financial help, according to a University of Arizona study, which also found that only 49
percent of graduates are working full-time.
"Whether or not a weak labor market is increasing the need for intergenerational support -- a likely
driver in today's economy -- our data clearly showed that many young adults today may not be
earning enough to make it on their own, even when working full time," the report stated.
Most of the debt that young adults face is student loan debt, which totals more than $1.2 trillion,
according to the Federal Reserve. Of that debt, approximately $124 billion is more than 90 days
delinquent.
What we have done to our young people is shameful. We have encouraged them to sign up for a
lifetime of debt slavery before they even understand what life is all about, Snyder wrote.
The Congressional Budget Office predicts that the economy will stall by 2017 because
Americans will continue spending, but wages and wealth wont be going up - leading to
increased income inequality in the country, the Guardian reported.
That ever-increasing gap between income and consumption has been filled by borrowing, the
Guardian said. These were the debt dynamics in the lead-up to the recession. But they are also the
dynamics leading out of the crisis, and continuing today with no end in sight.
Economists have not agreed on how to stave off the impending crisis. But Americans addiction
to spending on credit will not help.
The problem is, the more debt we have, the more future income must be used to pay the debt and
its interest, which reduces the money we have to spend on things. This works to slow the economy,
Butler wrote.
Eventually, the negative effect of the debt load becomes stronger than the positive effect of the
added spending and a recession is triggered or worse.
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Comments (49)
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Alan 17.06.2014 11:12
$60 trillion is not the nation's debt it is the accumulated amount of money that the
banksters and politicians have stolen from the American worker since the last time
the budget was balanced. (probably early 60s JFK era) Huge illegal hidden accounts
are everywhere and a person like David Rockefeller has over a $trillion stashed
away. They want us to suffer and take on their debt. We did nothing but work and
they did nothing but lavishly spend and steal. Even steal the country's gold. We can't
even pay back the countries who let us store their gold for safe keeping.

Larry Coffield 17.06.2014 11:08
We still have nations whose thug leaders give away their sovereign gold for our fiat
paper. Ah, Yats, he gave us 67 tons of Ukraine gold. He gives it to our IMF front run
out of the Treasury, and we give Ukraine debt bondage.
We are near-collapse, but guys like Yats and Chocolate Boy keep us afloat.

Terry Ross 17.06.2014 11:07
I can only imagine that the effect on Americans when they cannot borrow any more,
will be similar to that experienced by rich slaveowners in the South at the end of the
Civil War. Suddenly they found themselves moving from a privileged position to
one of low standing and wealth.
Psychologi cally this is going to be hard for most to adjust. Their whole life, the idea
of an exceptional nationality has been drummed into them. The best, biggest,

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strongest, wealthiest etc will be but a remembrance of past empire.
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