Tag: debt

One Third Of Americans Have More Credit Card Debt Than Savings

One in three Americans now have more credit card debt than emergency savings, according to the latest survey by financial services company Bankrate.

As Statista’s Anna Flecks shows in the chart below, this is up ten percentage points from 2011, when the company first started polling the question.

Meanwhile, around 53 percent of respondents said that their savings were currently exceeding their credit card debt.

This is down two percentage points from the same time last year, but slightly up from 2011.

Around one in ten Americans are living paycheck-to-paycheck in 2025, not making any debt or saving up money.

You will find more infographics at Statista

Millennials were the most likely to say that they had tapped into their emergency savings over the past 12 months.

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2 In 5 Young Adults Are Taking On Debt For Social Image, To Impress Peers, Study Finds

You can thank the Tik Tok, Instagram world we live in…

Money may not buy love, but for many young adults, it’s still the ticket to attention. A new study shows that two in five Gen Zers admit going into debt just to impress others — often in dating and social situations, according to Credit One Bank.

The pressure to perform financially is high among younger generations. Half of Gen Z and millennials (51%) say they’ve faked wealth or success, with Gen Z leading at 54%. Nearly 38% admit they’ve damaged their credit score or gone into debt to impress someone, and 37% say they’d even overdraft their accounts for a date. Men feel that pressure most: 46% would go into debt for a single date, compared to just 28% of women.

Credit One Bank writes that more than half of consumers say a high credit score makes someone more attractive, while nearly 70% would lose confidence in a boss with bad credit. Still, disclosure is rare: 54% of Gen Z and millennials prefer not to share their financial details with a partner until things get serious. Only 8% call poor financial history a marriage dealbreaker. Nearly half (48%) say they’d marry someone with a shaky financial past, especially if that person was improving. Gender gaps persist: men (47%) are more forgiving, while women are twice as likely to reject a partner over money issues (10% versus 5%).

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Congress close to missing ‘basic’ budget deadline for 29th year, watchdog group says

Congress is on its way to missing a “basic” budget deadline for the 29th year in a row, according to the Committee for a Responsible Federal Budget.

Meanwhile, the deficit so far into the current fiscal year is larger than the same period last year. 

“We’re less than a month away from a possible government shutdown, and lawmakers are once again finding themselves without a plan to keep the government funded,” said Maya MacGuineas, CRFB’s president. “If all 12 appropriations aren’t signed into law by September 30, it will be the 29th year in a row that they failed to meet the most basic deadline in budgeting. That’s not a streak to be proud of.”

MacGuineas said that the current spending showdown is the latest example of how broken the budgeting process is in Washington.

“This is just another sign that the budget process is completely broken. Congress hasn’t passed a real budget resolution in 10 years. Often, they pass no budget at all. And when they do pass one, it’s either full of fantasy math, simply an excuse to facilitate the passage of partisan reconciliation bills, or both,” she said. “Going through the process of crafting a budget around the nation’s priorities now sounds like a fairytale – in fact, the President hasn’t even bothered to submit a full budget for Fiscal Year 2026.”

The federal government has borrowed $1.9 trillion so far into FY2025 from September 2024 through August 2025, according to the latest Congressional Budget Office (CBO) data. The borrowing is slightly higher than the same time period of fiscal year 2024.

However, the monthly deficit for August is lower than last year. 

The deficit was $360 billion in August 2025, which is down from $380 billion in August 2024. 

According to CBO data, federal tax revenue for August 2025 was $344 billion, which is a $37 billion increase compared to August 2024. 

Spending in August 2025 was $17 billion higher than August 2024.

In total, the deficit so far into FY2025 is $1.9 trillion compared to $1.8 trillion during the same time period of FY2024.

The CRFB estimated that the FY2025 rolling deficit is about 6.4% of GDP, which is close to FY2024.

“Over the past 12 months, total nominal revenue was $5.2 trillion compared to $4.9 trillion over the same period prior. Nominal spending was $7.1 trillion over the past 12 months compared to $6.9 trillion the same period prior,” read a CRFB analysis.

MacGuineas suggested that lawmakers should work to avoid a shutdown and improve the fiscal situation of the country at the same time. 

“In light of our massive debt, they should reduce both defense and non-defense spending levels below their current levels and extend the expiring discretionary spending caps to enforce additional deficit reduction,” she said. 

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Wealthy Liberal Enclave of Santa Monica to Declare ‘Fiscal Emergency’ over Sexual Abuse Payouts

The city council of Santa Monica, California, will be asked to declare a “fiscal emergency” this week over hundreds of millions of dollars that it has paid in ongoing sexual abuse litigation.

The city by the beach, which has been hit by homelessness, crime, and an ongoing retail collapse, now faces fiscal catastrophe.

The Santa Monica Daily Press reported: “The dire financial situation is a result of a shortfall in revenue relative to forecasts combined with ongoing litigation, most notably the Uller sexual abuse case.”

The publication reported in 2023 that the city had reached a $229.8 million settlement over the claims: “Eric Uller was accused of abusing young boys between the late 1980s and early 2000s while he was employed by the City and volunteered in the Police Activities League (PALs), a city owned nonprofit. He committed suicide before his criminal trial in 2018.”

The Los Angeles Times reports that the case has crashed the city:

Services in Santa Monica are also suffering, according to the [city’s] report. During the COVID-19 pandemic, city leaders slashed the city’s budget and eliminated hundreds of positions. City services haven’t been restored to pre-pandemic levels, and several capital projects remain unfunded.

…

The report also cites recent and proposed changes by the federal government, including tariffs and mass deportations, that could affect the local and national economies.

…

In April, Santa Monica ended negotiations with Olympics organizers to host beach volleyball during the 2028 Games.

Santa Monica is often referred to as the “People’s Republic of Santa Monica,” due to its left-wing policies. It is one of the wealthiest towns in America, and diverts public resources to ideological policies as climate change, criminal justice reform, and resisting immigration enforcement (though it is not officially a “sanctuary city”).

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Washington’s Fiscal Doom-Loop

With U.S. gross debt now at a staggering $37 trillion—roughly equivalent to the combined debt of all other major advanced economies—Washington is trapped in a fiscal doom loop of its own making. Decades of bipartisan overspending have pushed the nation to a point where a mere 1% increase in mean Treasury interest rates adds $370 billion to annual debt service costs. The arithmetic is unforgiving. Yet, Donald Trump’s second administration is doubling down, pursuing policies that risk accelerating the crisis.

Consider the following combination: President Trump’s push for the Federal Reserve to slash interest rates by as much as 3%, his aggressive mix of tax cuts, tariffs, and subsidies aimed at “reshoring” American manufacturing, his championing of increased military spending and expanded domestic outlays. Absent fanciful projections about growth rates, it is overwhelmingly likely that tax revenues would plummet while spending obligations soar, widening the already yawning fiscal gap.

Already the Committee for a Responsible Federal Budget (CRFB) estimates annual deficits of 6-7% percent of GDP over the next decade, regardless of which party controls Congress. Trump’s first term saw the national debt rise by $7.8 trillion, driven by the 2017 Tax Cuts and Jobs Act (TCJA), COVID spending, and bipartisan spending increases. Biden picked up where Trump left off, and Trump in his second term is promising more of the same, with proposals to extend the TCJA and cut corporate taxes further, potentially adding an additional $5 trillion to $11.2 trillion to the debt by 2035.

Those hoping the Federal Reserve will be able to do anything to help, including President Trump, are bound to be disappointed. In the case of hoping for lower interest rates to finance yet more spending, while the Fed does control short-term rates, longer-term yields are market-driven. Aggressive rate cuts could spark inflation fears, pushing up 10- and 30-year bond yields, as economists Ryan McMaken and Kenneth Rogoff have noted. Long-term rates will likely rise despite the cut. This dynamic is already evident, with markets resisting Fed dovishness by increasing Treasury borrowing costs.

The Fed faces a trap: tightening policy balloons debt service costs, while loosening invites market backlash, undermining the dollar and raising long-term rates. In 2024, net interest payments reached $879.9 billion, surpassing defense and Medicare spending. With the debt-to-GDP ratio at 119.4% in mid-2025, the Fed’s room to maneuver is shrinking.

Then there is the fading “Dollar Discount”: For decades, the dollar’s status as the world’s reserve currency has shaved 0.5 to 1% off annual Treasury borrowing costs. However, in an increasingly multipolar world—where China, Europe, and others are developing parallel payment systems and central banks are diversifying their holdings—this “exorbitant privilege” is at risk. The so-called “Mar-a-Lago Accord,” a rumored proposal for selective default on foreign-held debt, has heightened doubts about U.S. creditworthiness. Moody’s downgrade of the U.S. credit rating in 2025 cited unsustainable deficits and growing interest costs, warning that the debt-to-GDP ratio could hit 134% by 2035. Eroding confidence in the dollar will drive borrowing costs higher, compounding the crisis

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National debt to rise to 120% of GDP by 2035, budget watchdog warns

The national debt is projected to rise from 100% of the U.S. Gross Domestic Product (GDP) at present to 120% of GDP by 2035, according to the latest figures from the Committee for a Responsible Federal Budget (CRFB), a nonpartisan fiscal policy think tank, based on baseline budget data from the Congressional Budget Office.

The CRFB released an adjusted August 2025 baseline, which found that annual deficits will “remain above 6% of GDP throughout most of the decade,” which is “more than twice the 3% target advocated by some policymakers.”

The budget watchdog group estimated that bringing the federal deficit down gradually to 3% of GDP would require around $3.5 trillion in savings over five years, including interest, or $7.5 trillion over ten years.

“To hold debt at 100% of GDP, approximately $4 trillion is needed over five years, or $9 trillion over the decade,” read their analysis.

The CRFB found that achieving a deficit equal to 4% of GDP would require about $5 trillion in savings while balancing the full federal budget, including interest, would require about $15.5 trillion in total savings.

The watchdog group noted that economic growth alone cannot solely take the place of major fiscal policy changes to get the fisacl situation in the U.S. under control. The CRFB recommended that the U.S government implement “super PAYGO” as well as trust fund reform and other spending reduction initiatives.

“Under Super PAYGO, every dollar of new spending or tax cuts would be offset by at least two dollars of revenue increases or spending reductions, thus ensuring that new tax cut and mandatory spending legislation also includes deficit reduction,” the CRFB said.

CRFB noted that “faster growth can make these fiscal goals easier.” However, the watchdog group said that “thoughtful pro-growth deficit reduction and reform is likely the best way to put the country on a sustainable fiscal path.”

The CBO recently released a separate estimate which found that the Trump administration’s tariffs will cut the U.S. federal deficit by $4 trillion through 2035. 

The analysis found the tariffs would lead to $3.3 trillion in direct tariff revenue and $700 billion in savings from lower interest payments on borrowing. These projections are revised from CBO’s earlier estimates. In June, the CBO had estimated that tariffs would offset budget shortfalls by $3 trillion.

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On The Road To A Hyperstate: EU Commission Circumvents Financing Rules

The European Union is funded by contributions from its member states. At least, that’s what the founding treaties say. In practice, however, the EU has long been taking other paths.

At the core of Europe’s financial architecture lies a clear separation of responsibility and liability: Article 125 of the Treaty on the Functioning of the European Union (TFEU), the so-called “No-Bailout Clause.” It states, unequivocally, that neither the Union nor individual member states may assume the debts of other states. The purpose of this provision is to prevent free-rider effects (moral hazard) at the expense of other member states: each state is responsible for its own obligations.

Still, the clause does not exclude political support, as long as it does not mean assuming the existing debts of other states. A notable example of this practice were the bailout programs for Greece during the sovereign debt crisis one and a half decades ago.

Article 310 TFEU further regulates the EU budget: revenues and expenditures must be balanced every year, and the budget may only be financed through own resources such as member contributions, tariffs, or approved revenues. Independent loans by the EU Commission exceeding the approved framework are prohibited.

Together, these rules form the legal backbone of EU financial policy: no automatic liability, no autonomous EU debt, and only fully covered spending.

This design was deliberately chosen to prevent the emergence of a supra-state in Brussels and to defend the national scope of action of member states against an expanding Brussels bureaucracy.

Theory vs. Practice

That’s the theory. In practice, the EU has steadily increased its presence as a borrower in the bond market. It began in 1976 with the first European Community bond to support Italy and Ireland during the oil crisis. In the 1980s and 1990s, further issues followed for France, Greece, and Portugal—always aimed at demonstrating collective solidarity and easing fiscal tensions.

The 2008/2010 financial crisis marked a decisive turning point: with the European Financial Stabilisation Mechanism (EFSM) and, in 2012, the European Stability Mechanism (ESM), the EU began deliberately supporting over-indebted member states via bond issuance. In 2010, the European Central Bank announced it would purchase euro sovereign bonds on the open market to prevent the collapse of the monetary union—always in close coordination with EU institutions.

The COVID years saw a new dimension in 2020: for the first time, the EU issued Social Bonds under the “SURE” fund. At the same time, the “Next Generation EU” program started, providing around €800 billion in crisis aid. Since 2025, the Union has increasingly relied on so-called “sustainable bonds” (Green Bonds) and plans to issue short-term treasury bills for improved liquidity management.

The EU and ECB now operate in tandem, integrating ever-new financing instruments into the capital markets. The signal to the market is clear: we are ready to meet growing demand for euro bonds. And as collateral, not only the European taxpayer but also the ECB’s virtually unlimited liquidity is on standby. What could possibly go wrong?

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The Debt And Deficit Problem Isn’t What You Think

In recent months, much debate has been about rising debt and increasing deficit levels in the U.S. For example, here is a recent headline from CNBC…

The article’s author suggests that U.S. federal deficits are ballooning, with spending surging due to the combined impact of tax cuts, expansive stimulus, and entitlement expenditures. Of course, with institutions like Yale, Wharton, and the CBO warning that this trend has pushed interest costs to new heights, now exceeding defense outlays, concerns about domestic solvency are rising. Even prominent figures in the media, from Larry Summers to Ray Dalio, argue that drastic action is urgently needed, otherwise another “financial crisis” is imminent.

The problem with Larry Summers’, Ray Dalio’s, and many others’ warnings of impending financial doom is that they have been warning of that very problem for decades. Such was the point of our previous discussion:

“It doesn’t take much to understand that Ray Dalio, a hedge fund titan, is like every other human being and is prone to error. I will not dismiss Dalio entirely, as his track record of managing money at Bridgewater is nothing to be scoffed at. However, his track record is far less enviable regarding debt crisis predictions. Here is a brief timeline.”

  • March 2015 – Hedge Funder Dalio Thinks the Fed Can Repeat 1937 All Over Again
  • January 2016 – The 75-Year Debt Supercycle Is Coming To An End
  • September 2018 – Ray Dalio Says The Economy Looks Like 1937 And A Downturn Is Coming In About Two Years
  • January 2019 – Ray Dalio Sees Significant Risk Of A US Recession
  • October 2022 – Dalio Warns Of Perfect Storm For The Economy (That was also the stock market low.)
  • September 2023 – Dalio Says The US Is Going To Have A Debt Crisis

But you can even go further back than these when he wrote about some of his biggest mistakes about a decade ago:

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Wind & Solar Energy Bankrupting Sunshine State

The State of Florida, long a model of economic growth and conservative fiscal policy, now faces a paradox: while bathed in sunshine and surrounded by natural beauty, it is flirting with energy insolvency. Despite its bounty of natural gas and a history of reliable and affordable electric power, the Sunshine State is increasingly embracing wind and solar energy—two intermittent sources heavily reliant on subsidies, regulatory distortion and taxpayer support.

According to energy analyst Dave Walsh, a speaker at last weekend’s Reclaim Campaign event in Venice, Florida, this green energy shift is not only misguided—it is a direct threat to Florida’s economic sustainability.

Dave Walsh, former president of Mitsubishi-Hitachi Power Americas and a frequent commentator on energy policy, has issued repeated warnings about the consequences of an overreliance on renewable energy. His central thesis is simple: wind and solar power are not financially or technically viable replacements for baseload energy.

Unlike clean coal, natural gas or nuclear—which produce consistent power regardless of time or weather—wind and solar depend on conditions beyond human control. In Florida, that volatility translates into higher costs, increasing grid instability, and growing dependence on backup generation that negates many of the claimed environmental benefits.

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Think Uncle Sam Owes $37 Trillion? It’s Far Worse Than That

When asked how far the US government has plunged into the red, many fiscally-conscious Americans will tell you the national debt has reached $37 trillion. As distressing as that official number is, America’s true fiscal situation is even worse — far worse. According to a barely-publicized Treasury report, the actual grand total of Uncle Sam’s obligations is more than $151 trillion.

That huge discrepancy springs from the fact that the federal government doesn’t hold itself to the same accounting standards it imposes on businesses. Rather than using accrual accounting — which recognizes expenses when they’re incurred — our Washington overlords self-servingly use simple cash accounting, only recognizing expenses when they’re paid. As a result, discourse on federal obligations solely focuses on the national debt, comprising Treasury bills, notes and bonds.

Once a year, however, an obscure report delivers a more accurate version of Uncle Sam’s balance sheet. While it receives almost no attention from journalists or public officials, the Treasury Department is required to submit an annual report to Congress detailing the government’s financial condition. Critically, the 1994 law compelling this report mandates that it reflect “unfunded liabilities” — that is, commitments made without any dedicated assets or income streams to ensure they’ll be kept.

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