24 Nov Government Debt Dwarfs Consumer Debt
Federal Government commitments to the banks and mortgage lenders exceed $5 trillion.
How are consumers supposed to get their finances in order with Washington making these gigantic commitments? Of our money?
The consumer is the one ultimately responsible for this debt, on top of about $3 trillion of revolving and non-revolving debt that we actually asked for.
Hey, its only money. Of course, the Fed can print more, and if you or I try that, we will be prosecuted and jailed.
Consumer debt was thought to be growing too fast in the early part of 2008.
Since this massive government bailout process started, only last July, the earlier headlines about consumer debt increases seem almost laughable.
Many believe it was the wasteful spending and continuous record borrowing of the Federal government that inspired consumers to spend more than they make.
Bad ARM mortgages are still coming off artificially low teaser rates, the unwinding of the derivatives based on the bad mortgage securities has not even started, as the balance sheets still conceal how much of these anyone holds.
Consumers were borrowing to keep up with inflation in the first quarter of this year, wait until double digit inflation hits next year.
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