Let’s talk about debt, baby…

In 2015, total US government revenue, federal, state, and local, was “guesstimated” to be $6.38 trillion, with federal $3.25 trillion; state $1.84 trillion; local $1.29 trillion. www.USgovernmentrevenue.com

Gross Federal Debt: That’s the gross amount of debt outstanding issued by the US Treasury. “Debt held by the public” and “debt held by federal government accounts”. At the end of 2015 the federal debt was $18.1 trillion.  At the end of FY 2016 federal debt is budgeted to be $19.4 trillion.  http://www.usdebtclock.org/

The IMF reported in April of 2012: Household debt soared in the years leading up to the Great Recession. In the five years preceding 2007, the ratio of household debt to income rose by an average of 39% points, to 138% points.  If this does not scare you, it should.  High level of household debt is holding back the economy.  High level of debt means lower consumer spending, which leads to job loss.

“With 7 of the past 10 quarters reflecting year-over-year regression in consumer performance, evidence is mounting to support the notion that credit card users are reverting to pre-downturn bad habits,” CardHub CEO Odysseas Papadimitriou said in a statement.

Last year, credit card debt in the U.S. surged by approximately $71 billion to $917.7 billion, according to a new study from CardHub.com. The research also found that most of the debt accrued in 2015 came in the fourth quarter, when Americans tacked on more than $52 billion.

So as consumers, we are getting back into our old habits of saving less and charging more. In conversation with a family member, I jokingly asked “what would you do if given $50,000 today?”  Her answer, “pay off most of my credit card debt.”  What??!!  I had no idea.  I think consumer debt is the silent downfall of today’s economy.