How The Current Economy is Affecting Your Wallet

Summary: The media loves to talk about the economy in a broad sense but what does it mean for us individually? We’ll explain how the current economy is affecting your wallet.<br> There are four major economic topics that are generating most of the ink in the past several months. What’s happening in the current economy and should we worry?<br> Debt<br> There are two types of debt that continue to grow.<br> National Debt<br> The<a href="https://www.listenmoneymatters.com/national-debt/"> national debt</a> stands at $21.3 trillion. At its current rate of growth, by the year <a href="https://www.washingtonpost.com/news/wonk/wp/2018/06/26/the-federal-debt-is-headed-for-the-highest-levels-since-world-war-ii-cbo-says/?utm_term=.0ac20c1e4787">2028,</a> it will be almost equal to the size of the entire U.S. economy. Should we worry?<br> Well, yes and no. It’s a bit like climate change. We can continue to kick the can down the road, so it doesn’t affect us too much in the short term but long term, this kind of unrestrained debt can have dire consequences.<br> This amount of debt threatens programs like Social Security and Medicare. These kinds of so-called “entitlement programs” now account for almost two-thirds of the federal budget. It will be hard to cut national debt without making significant cuts to entitlements.<br> In our country’s existence, we have never found the limit where the national debt becomes too much. If we can’t find the limit on our own, some kind of catastrophic economic correction will find it for us.<br> Continuing to kick the can down the road this way is immoral. But that doesn’t concern the <a href="https://www.listenmoneymatters.com/leave-millenials-alone/">Boomers</a> whose motto seems to be, “I got mine, fuck everyone who comes after.” Like climate change, by the time the national debt is a problem, they’ll be dead. <br> Ironically, our mad spending on defense now may threaten national security one day. All those shiny new toys the DOD buys now when our national security isn’t at risk from the kind of things they can defend us from means that if the day comes, we are under physical threat, they won’t be shiny and new anymore.  But there won’t be any money left for new ones.<br> We need to worry about the national debt because politicians aren’t. Again, all that pork barrel spending gets them reelected, but when it’s time to pay the piper, they will be long out of office and long dead.<br> All that said, should you stay awake at night worrying about this? Not for now.<br> Household Debt<br> Household debt in the U.S. is also at an all-time high, <a href="https://qz.com/1280927/us-household-debt-has-hit-an-all-time-high-of-13-2-trillion/">$13.2 trillion.</a> Most of that is <a href="https://www.listenmoneymatters.com/how-to-actually-save-thousands-on-your-mortgage/">mortgage</a> debt which can be considered “good debt.”<br> <a href="https://www.newyorkfed.org/microeconomics/hhdc"></a><br> Economists are not bothered by this, explaining that this is largely due to inflation and increased population. And the growth is not as rapid as it was before the financial crisis when mortgage debt increased on pace with housing prices.<br> But Americans now have “layers” of debt obtained through a variety of lenders.<br> Personal loans hit a record $120 billion. What is driving this? Online borrowing which has made getting a personal loan as fast and easy and placing a Seamless order. In 2010, online loans accounted for just 1% of personal loans, that number is now 36%!<br>  <br> <a href="https://www.listenmoneymatters.com/go/nationaldebtrelief/"></a><br>  <br> Economists are also not concerned about this. Many of these loans are taken out as <a href="https://www.listenmoneymatters.com/go/lending-club-refinance/">debt consolidation loans</a> which wh...