To put things into perspective:
- It took Uncle Sam 232yrs to accumulate its first $10tn in debt,
- 9yrs to accumulate its second, and
- 5yrs to reach its third.
The trip from $33 to $34tn in debt was a short one, requiring only 3mths, from Sep to Dec of 2023, Strategas has calculated.
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OUCH!
Americans spent >$1.1tn on interest payments alone last quarter.
What’s more, in a major shift, nearly half of that spending was not on mortgages as higher rates from Fed are hitting on credit card or car loan debt.
The "effective" rate on outstanding mortgage debt sits at just 3.8%, far below the 6.9% that new homebuyers are facing on avg for 30y fixed-rate mortgage
BUT credit card rates have jumped from <15% on average in Feb2022 to nearly 21.5%.
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