In the first nine months of 2024, the number of credit card bankruptcies in the United States increased by 50 percent. This is the highest level since the post-crisis period of 2010 and is likely to exceed those of 15 years ago.
Americans’ total credit card debt reaches $1.2 trillion. Interest rates on credit cards are also at a record high of 24%. Borrowing at this rate is not due to the good life, as the inflation crisis and the rise in the cost of living will take its toll. One-third of the U.S. population, representing the poorest strata, has no savings. In addition, even the middle class has now squandered the savings of the pandemic period. Thus, we have to resort to credit cards more and more often.
Meanwhile, the impact of tariff wars is also emerging. In some respects, the situation in American society resembles the logic of the American government. The level of corporate bankruptcies in the United States is also close to its peaks 14 years ago. Record borrowing and accepting millions of illegal immigrants helped the Biden team forecast economic growth. While U.S. citizens will lose 800,000 jobs in 2024.
In 2025, both incentives will be removed, meaning they will have to tighten their belts and deport illegal immigrants. Under these circumstances, the US economy can expect real “shock therapy”.
Translated and edited by Alex Kada
