The State of American Debt Slaves: Q4 2020. Consumer Borrowing in Weirdest Economy Ever | Wolf Street

Until the Financial Crisis, there had never been a year-over-year decline in revolving credit balances. That was a new phenomenon, after decades during which Americans had amassed ever more credit card debt, buying things they couldn t afford and paying breath-taking interest rates for the privilege. And so they did their job and consumed and cranked up the consumer economy.

That scheme blew up during the Financial Crisis, when masses of credit card borrowers defaulted and let banks eat the losses, along with the losses from their defaulted mortgages.

Now we have the second period of year-over-year declines, and it s the steepest ever, but it s not caused by defaults, but on one hand by huge amounts of government stimulus money in various forms, and on the other hand, by limits to consumption: Many services restaurants, bars, sports venues, concerts, hotels, cruises, flights to exotic destinations, etc. have become partially or totally unavailable.

via wolfstreet.com