The share of spending by the top 10 percent keeps rising.
Economy Increasingly Dependent on the Wealthy
The Wall Street Journal reports The U.S. Economy Depends More Than Ever on Rich People
Many Americans are pinching pennies, exhausted by high prices and stubborn inflation. The well-off are spending with abandon.
The top 10% of earners—households making about $250,000 a year or more—are splurging on everything from vacations to designer handbags, buoyed by big gains in stocks, real estate and other assets.
Those consumers now account for 49.7% of all spending, a record in data going back to 1989, according to an analysis by Moody’s Analytics. Three decades ago, they accounted for about 36%.
Between September 2023 and September 2024, the high earners increased their spending by 12%. Spending by working-class and middle-class households, meanwhile, dropped over the same period.
Taken together, well-off people have increased their spending far beyond inflation, while everyone else hasn’t. The bottom 80% of earners spent 25% more than they did four years earlier, barely outpacing price increases of 21% over that period. The top 10% spent 58% more.
A stock market selloff or decline in home values that rattles the confidence of the top 10% and causes them to cut back would have a significant effect on the economy. Consumer sentiment is starting to slide overall, including for the wealthiest third of consumers, thanks in part to tariff threats.
None of this is surprising. I have been discussing the two-state economy of the asset holders vs the renters for a long time.
The two-state economy decided the election as young voters and Blacks switched to Trump in record numbers.
This means Trump needs to deliver on inflation, but he can’t afford a recession to deliver.
The CPI, PPI, and home prices are not heading in the needed direction and there are many signs of a weakening economy including jobs, retail spending, immigration, and housing.
Trump’s tariffs rate to be a disaster and that could be the straw that finally breaks asset prices.
Related Posts
February 14, 2025: Retail Sales Crash – Did the Consumer Finally Throw in the Towel?
The Census Department shows huge across-the-board declines in multiple categories, down 0.9 percent overall.
February 19, 2025: Fed Minutes Show Doubt About Inflation Progress and a Concern Over Tariffs
February 21, 2025: S&P Global PMI Shows US Business Activity Growth Has Nearly Stalled
Output growth falters and payrolls decline in February, as optimism slumps
and costs rise.
February 21, 2025: Existing-Home Sales Drop 4.9 Percent in January, More Than Expected
After three months of increases, sale took a big dive in January.
February 21, 2025: Student Loan Borrowers Crushed by Appeals Court Ruling, Credit Scores Plunge
The courts are busy. This one goes against Biden. Economic repercussions are significant.
The expected result of tax cuts for the very wealthy over the last 4 decades. Cut taxes, more money flows into assets, asset prices go up, the wealthy get wealthier. Rinse, wash, repeat. What’s not to like?
Open immigration, no gold standard, cost of environmentalism, more divorce, more illigitimacy\welfare, cost of Democrat entitlements and Obamacare being hundred times what they said they would cost…high taxes on business, more expensive land and energy….medical cost inflation…rich buying most of the new debt as a safe asset….lower taxes took the lid off incomes and allowed lots of people to start business or get high salaries, including females and minorities…Tiger Woods is a billionaire, so is Oprah…..lebron James…..rachel ray, martha stewart….JayZ………
Don’t forget dogs and cats living together!!!
Easy money, bailouts and illegal immigration (all unfair to the average citizen). If your savings can’t keep pace with inflation it is difficult to climb the ladder…add in a bunch of inflation that chews down the savings you do have while making your everyday expenses and loans even more expensive and having to compete with millions of extra workers (who will work for less and pay little to no taxes) in the job market…and here we find the average citizen struggling. Not surprised!
Add to that the mountains of new regulations over the decades, a terrible education system, and all the draconian COVID policies which torched small businesses…
This explains why carmakers have no interest in selling less expensive cars. It’s the rich that are outspending most others on what is becoming less a necessity and more a luxury due to cost, depreciation, repair and insurance.
For people who drive mostly locally, it might be cheaper at the end of the year to just call for a ride.
There are “cheap cars” like Nissan Versa ‘s MSRP is around $17,500, compared to average starting hourly wage of $15 for fast food in the Florida Panhandle (or equivalent to $30,000 a year full time salary).
Mitsubishi has low prices cars like its smalls sedan Mirage. Chevy Trax is around $21,000 and is another good car.
This is a starkly interesting observation. And very much consistent with the argument that the Fed is an engine of inequality.
Agree with the sentiment but the FED is an engine of unfairness. Equality of opportunity is a great goal, results are up to decisions of the individual.
Today’s top ten percent was part of yesterday’s bottom ninety percent. The greedy aspirational fraction of the ninety percent work, save, and invest their way to the top ten percent. What’s not to like?
by far not even close what determines your wealth is the financial attainment of your parents
Especially if their dad was president.
The statistics show that most “family wealth” is gone by the third generation. The market has a built in correction mechanism…as long as there are not bailouts!
But the Fed keeps peddling the lie that inflation is caused by the wages /prices spiral, and that therefore it needs to rise rates to cause more unemployment. So the question is: are they that dumb or are they acting in bad faith, implementing policies that favor wages suppression, another grift to the wealthy?
Was that a rhetorical question?
If gov debt will rise by $4T in the next 3/4 years the markets might flop: that’s 50% less than: Obama, Trump during covid and Biden. That’s stepping on the brakes !
“The federal budget deficit totaled $838 billion in the first four months of fiscal year 2025, the Congressional Budget Office estimates. That amount is $306 billion more than the deficit recorded during the same period last fiscal year. Revenues were $11 billion (or 1 percent) higher, and outlays were $317 billion (or 15 percent) higher.”
That $838 billion deficit is due to the “gold bars being thrown off the Titantic” as far as Birdbrain Biden administration trying to loot as many taxpayer dollars as possible from 1 October 2024 to 1 February 2025.
I suspect the rate of looting increased drastically after the November election.
I’d love to see the cash flow analysis to explain the $317 billion increase in spending compared to the previous fiscal year.
And I like Secretary Zeldin a lot. President Trump has picked smart leaders like Zeldin who will help to improve the government’s financial health.
https://www.epa.gov/newsreleases/administrator-zeldin-announces-billions-dollars-worth-gold-bars-have-been-located
.
in 2024 Warren Buffett paid $29 billions in federal, state and local taxes.
How much did Trump pay?
Zero?
It is obvious Trump (or any rich person that buys things) pays taxes. He is rich, buys lots of things and pays sales tax, property taxes, etc. Why do you think he doesn’t?
This number sounds a bit high. Did you forget a decimal point?
It’s close, 2024 Federal tax was 26.8B$ according to Warren in the 2024 Berkshire report.
https://www.berkshirehathaway.com/letters/2024ltr.pdf
So he was referring to Berkshire Hathaway, NOT Warren Buffett as an individual.
AI determined years ago the best form of government is a robust middle class. The middle lifts up the poor and pushes people with unique abilities higher.
Makes sense but In order for this to happen, the 10% would have to agree. Ain’t gonna happen. The world is a ruthless place. Either do or do not. No try, no crying in baseball….all that stuff.
“Trump’s tariffs rate to be a disaster and that could be the straw that finally breaks asset prices.” Maybe that’s intentional, he knows the bubble needs to pop since the fed certainly isn’t going to do it, they’ve spent almost 20 years papering over the last one.
“Economy Increasingly Dependent on the Wealthy”
Better headline: “Prices increasingly distorted by the pandemic wealthy.” The artificially wealthy “new money” grifters spend without regard to price, damaging economic balance. The Fed blew up the “price stability” portion of its mandate during Covid without ever acknowledging it.
The deal that is coming is to rebuild middle class America.
Apple announcing it will be investing in US jobs.
20,000 expected is a start.
Are Tariff usage as leverage an incentive? Do you need air to breathe.
Does Newson need 40 billion from Fed? Does California need to upgrade voter roles for Democracy to flourish. Would appear Newsom is a born again believer in one legal person, one vote.
Here is a question absolutely no body asks.
What holds up asset prices?
Answer: ability to spend.
How is money to be spent accumulated?
Answer: Why it’s earned. That is until the new paradigm began of shipping jobs overseas and borrowing back in the states to sustain a lifestyle.
How can money get earned if there are no Jobs?
Well that is getting changed, which is the point of Tariff imposition.
Difficult to understand but Times they are a changing.
If you can take on debt in dollars to get assets (real estate, stock or anything creating passive income), then you “earn” money. Or at least, money flows your way as the FED makes sure that debt inflates away.
I guess the smarter ones understand that if one person gains wealth without doing anything productive, someone else must be productive without gaining an equivalent amount of wealth. Right?
From time to time the FED reverses the policy to prevent the economy from “overheating”, meaning if too many wannabees get on the debt creation side they get bankrupted by a little wave of deflation. They got to keep the club of people profiting a bit limited or it doesn’t work.
What you describe is the way Fed has run monetary policy to produce.
Last election rejected what has been the state of affairs for decades.
US must move beyond that failing model.
Hard Working is being targeted once again so that those with ambition for betterment of ones lot have the opportunity to make good.
Just have to look at what are the Cabinet picks to understand what values are getting elevated.
Almost every pick now confirmed are all self made people based upon ability and merit.
That is what made America Great in the past and will do so again.
The days of being slothful and then being rewarded for voting a certain way have ended.
Jobs are being whittled away and replaced by AI’s. Humanoid robots are coming to the factory floors.
Everything will be free and therefore, everyone will finally be equal as no one will be able to buy anything more than anyone else. Status will be a meaningless word.
Eventually, all national boundaries will be erased when AI’s take over.
Voila!
I certainly hope this is not the end of Human beings. 🙂
It is a pretty big universe and people will find a place in the Sun somewhere.
Personally I choose not to be a Cabbage or live like one.
This is faulty deductive reasoning:
“Here is a question absolutely no body asks.
What holds up asset prices?”
Nobody asks or studies that? Millions of people participate in the stock and bond trading market every single day and those are significant assets people own and trade. And market makers make bank studying exactly these asset prices and where they are likely to go tomorrow and five years from now.
Yes, ability to spend is one aspect of asset prices, but far from the only important one. And certainly you are not the first person to note this. So everything after that you write is just a personal POV of what you think is important, and not what the market thinks and knows.
I agree. And even if only a portion of these Apple jobs come to pass, let’s all remember that it arrived under Trump’s watch & not Biden’s. If the Golden Age of fiscal responsibility & security is possible, then the Trump’s 2nd term will be judged by a few outcomes in terms of movement towards or away from fiscal responsibility:
1) Much lower annual budget deficits
2) Recession or not which generally will equate to inflation
3) Which then equates to money or not in people’s pockets / start market returns
There are no certainties just probabilities as George Gannon says. So the larger #1 the more likely #2 becomes which makes #3 even less likely.
Time will tell, and I’m rooting for Trump’s success which is to say America’s success.
Days of ransacking America to spend its wealth everywhere else have ended.
If I had 8 hours to chop down a Tree, I would spend 6 hours sharpening my axe. Abe Lincoln
As for what is coming.
Trump most likely read this quote.
“Trump needs to deliver on inflation”
He’s not going to deliver. “$4 trillion increase in the debt limit so the U.S. can continue financing its bills”
Deficit spending will not only continue, but looks to accelerate.
I keep telling them that, and they get mad, but not a single one will deny it. They know.
As if Trump, Musk, DOGE, Congress & America can snap our fingers and make $1.82T in deficit spending go away in 4 years. With that kind of attitude, why even try?
$4T for 3/4 years ==> the deficit spending will decelerate. By the end of Trump II the federal debt might drop to $30T/ $34T in nominal terms. During Vance 8 years: down to $26T/$30T. This week chain saw Ilan might cuts the max, before Trump relax…
Trump, the father of the CARES Act, is the most inflationary president we have ever seen.
Does Trump Want Lower Gas Prices or Oil Sanctions on Iran?The Trump administration’s math on Middle Eastern energy supplies just doesn’t add up.https://reason.com/2025/02/24/does-trump-want-lower-gas-prices-or-oil-sanctions-on-iran/
If not higher………..
It is an inflationary depression. The high incomes can keep up spending but not the rest. The contracting economy will gradually cut down the number of high incomes.
A major recession will certainly tank people’s wealth affect.
The rich who shared the same foxholes in WW2 with the poor guys didnt see the poor as enemies like they do today. Wages stagnating since 1970 (no pay increase above inflation) has left this “richest country in the world” with a feudal system to come. 5000 families own everything and the rest make due as renters with minimum wages. And these people think Trump is gonna change that? He’ll encourage it.
A lot of people are renters nowadays because of the cock ups of the Fed with near ZIRP for a decade & Congress approving rent & mortgage relief during the fake COVID recession. There are other reason, of course, but these are the primary culprits. We’re going on 16 years of housing / rent inflation. That’s not Trump or Musks fault. The blame lays squarely at the feet of the Fed & Congress. In addition, the Fed stopped raising rates too soon & started cutting too soon. Again, Trump & Musk didn’t have anything to do with that. That’s on JPowell, Pelosi, RINOs, Schumer, et al.
Now, I’m all for closing the wealth gap and in no way want to give anyone in the top 10% a free pass. I’m all for closing tax loopholes to make sure corporations (20% of all taxes paid) & the top 1% (40% of all taxes paid) pay their fair share across the board. I’m fine with extending the Trump tax cuts while eliminating the cuts for people making $400-500K & above.
One of the best things Congress could do for broadening home ownership is to put curbs on institutional ownership of rental homes. While that probably is a pipe dream for now, I would agree that Trump & Congress don’t have the cojones to make that happen.
Since WW2? Look up the pareto principle. 80% of the wealth has always gone to 20% of the people, it’s ALWAYS been that way.
Do you know how 200 Spaniards conquered 3 million Incas? It wasn’t technology superiority or any kind of superiority, it was the promise of this dude named “Jesus” that would make life better for them and the promise of a better society.
80% of the Incas lived miserable lives hunting and gathering, mining, fishing, etc so they could take all of those goods and services to the “royal family.” It was 18 hour days of miserable toil for the few on top. In comes a new group with promises and the Inca’s say, “f&#k it, what these guys are offering has to be better than what we have now!” The rest is history.
Ultimately, the Incas were lied to because things didn’t really get better but at least they didn’t have the royal family any more. The 80/20 ratio just changed to different groups.
Rinse and repeat throughout history no matter the culture, region, religion or race.
At least the virgin sacrifices and heart removals at the top of the altars stopped!
Trump is their man; just look at his budget proposal. Medicaid cuts for MAGA, tax cuts for the billionaires, meme coins for himself. That’s the new Great Deal.
The Golden Steal…..
As I frequently repeat here: If you want to improve your life, stop complaining, get off your ass, and do all the hard work that is required. It is foolish to “expect” government to make your life better.
I am waiting to see if Trump will lead us to the Golden Age. But while I wait, I am working hard and minting money so that I don’t need him to be successful.
Better pull up a chair Dave cause youll be waiting awhile. The wealthy have to finally realize involving the 90% in the income stream is the only way to get things back to some kind of what we consider normal. Buffett and Bezos etc should be ashamed.
If you want their hard earned money for nothing, then I would say you should be ashamed. If you are suggesting they illegitimately “got” the money I would say you should be yelling at the referees (the government) for making unfair rules under which they were allowed to steal it rather than earn it. Fire the government! Has to be one or the other, right? If you think Buffett doesn’t live frugally you should homework that. If you think it is stealing that makes you wealthy and not hard work, then that is why you probably aren’t wealthy.
It’s funny how opinions on Mishtalk have changed. I remember a year ago, you’d get more down votes for these types of comments. While I totally agree with your self efficacy reminder, I’ve always disagreed with your public square position. Nowadays, it seems like most here are more in tune with both aspects of your post.
From what I can tell, there are many more Trump haters on Mishtalk than there was in the past. Most people seem to think that changing the status quo of governing is bad & that Trump’s methods are sure to fail.
Well, like we’ve said many times, the dumpster fire Trump was left to put out is definitely a five alarm across the entire country. And it may be that there’s no way for him to succeed. Unfortunately for America, if he does fail, this may be our last chance to keep the Titanic from going under.
Keep minting money! I’ll do my best to do the same as well as posting my opinions.
No worries!
‘…the straw that finally breaks asset prices.’
You mean the assets that democrats loaded up on as they unleashed record amounts of inflation? Somehow I don’t see the disaster in that.
– The share of spending by the top 10 percent keeps rising.
> The income of the Top 10% keeps rising, and/or the prices keep dropping, so it makes sense.
– The top 10% of earners are buoyed by big gains in stocks, real estate and other assets.
> They invest in those particular items, and can wait out gains. They are looking for places to “Park Money” while most of us are looking for “Enough Money” to get by on a weekly basis.
– Between September 2023 and September 2024, the high earners increased their spending by 12%.
> During this slowdown period, deals were a plenty, and those with money took advantage. I do in my own small way, by buying bulk whenever possible, on regularly used household items. A good enough sale, and I am stocking up!
– This means Trump needs to deliver on inflation, but he can’t afford a recession to deliver.
> Yes, and they are talking about tax rebates already. I get doing so, to show and appease the crowds, but we should be paying down debt, and not more giveaways. Isn’t that what got us into this mess?
– there are many signs of a weakening economy including jobs, retail spending, immigration, and housing.
> There sure are, and it’s going to get a lot worse, or should I say it has to? A lot of these job losses are by those not working, or used to working, and are going to have to find work. Many will not be capable of holding down a job, or will be so jaded by their new job they “Must Take” to make ends meet.
– Trump’s tariffs rate to be a disaster and that could be the straw that finally breaks asset prices.
> Or the savior He claims it will be? I’m torn on this one, as I see done right, then maybe, but also accepted as such is a long haul, but if it can be done, Trump will make it happen, IMO. If it goes sour, let’s hope we’re not all in, or can’t get out…
At some point it wont matter how many stocks or homes you have when you see nothing but people in rental housing eating Dollar General food. Then where are gonna get your doctors and military recruits from. They are killing themselves drowning in dollars.
The rich hang with like kind, and purposefully see none of this.
They are in there friendly bubbles or enclaves of safety and security, or at least they think so. Most have no idea what “Dollar General” is and I would guess a “Board game” would be their first choice?
Doctors certainly don’t generally come from the crowd of which you speak. They are from the 10% crowd you referenced. Military are mostly teenagers and low or no skilled people looking for direction. Spatter in some educated officers and your off and running.
The “Middle Class” will evaporate if this is not fixed, but if it is, they will SOAR! America was always meant for the lower class to move to the middle class and so on. Someplace along the way, the wealthy at the top decided to stop sharing their money. We gutted the middle class as a result, and increased the lower class. See something wrong here…
It will get fixed!!!
The direction its been going says otherwise
I don’t see that, and neither do most Americans right now. What direction are you looking at?
The graphs that say credit card balances have been rising for decades which is the only way that allows a person/family to “keep up with the Joneses” (and the card holders’ parents).
The only way, and I mean ONLY way for anyone (poor or rich) to significantly increase their chances of success is to spend less than you make, save for a rainy day, and improve your skills.
Next time Stu see if you can restrict yourself to 1-2 paragraphs. Your stuff will be more relevant and more people might actually read it. You are writing for your reader, not for yourself. 🙂
LOL, will you share your money with total strangers? If so, how much, what percentage of your annual income? The rich did not “decide” to stop sharing their money. If you do not like the current landscape, look at the policies that have been in place. Who makes the rules? The government does. Who decides the government? The voters do. The voters just voted for lots of change because they see the path we are heading down and it is not good. If things aren’t going well, maybe they should reverse some of the bad policies!
They’ll just emigrate to Portugal or Latin America.
I added a link to this in my 300 page notes and links for the book I am writing
Just finished a different book which I have to do first. Hopefully I get that second book done before the revolution starts
Trump might loosen his grip on gov bureaucrats to probe results and be more compassionate. He might shift his shock therapy to billionaires, launching a campaign against frivolous spendings, tax cheatings and silicon valley political abuse during the Biden administration. Lower corp taxes along with higher income taxes on Pareto top to reduce inequality. He will give the upper echelon incentives to invest in the economy to generate futures growth. The Trump administration will fill its coffer from higher taxes collection, smaller gov size and higher tariffs. JP might cut interest rates to ease debt payments and mortgage rates. A gov that cut its debt is less vulnerable to external shocks and financial crisis.
The American Dream Is Not a Coin Flip, and Wages Have Not Stagnated: https://www.civitasinstitute.org/research/the-american-dream-is-not-a-coin-flip-and-wages-have-not-stagnated
Moody’s Analytics and WSJ vs, unknown “institute”, hmm…
It’s not an “unknown institute”. It’s a think tank institute based at The University of Texas at Austin, which is clearly displayed at the top left of the article and which you would have seen, had you actually opened the article before posting your snark reply.
You’re not going to encounter much wisdom if you refuse to open links and read.
Interesting article. Thanks.
There is a trend developing, the situation detailed here, bulk of income taxes being paid by the rich, Magnificent 7 being the bulk of stock market gains, etc.
Vector is 1913
It’s outrageous! Taxes should only be collected from the people without much money!
You need a one-way ticket to Mars.
The bulk of income taxes get paid by the wealthy because THEY MAKE MORE MONEY! D’oh.
The people at the bottom don’t pay very much in income tax not only because the make less money but because they are eligible for numerous tax breaks that effectively reduce or eliminate any tax liability.
Instructive situation. If you and I make the same annual income and both have the same ability to draw on government programs if we need to (now or in the future) then isn’t that fair? Yes, right? If you start working harder or smarter than I do and make more money next year (because you are more productive), the government rewards you by taking more of your money! I work the same next year and pay the same taxes and didn’t get anything extra from the government. Is that fair? I mean you are getting a little more but not really all you should from your hard work. The government takes some of your extra hard work money for doing nothing more than it did the year before.
Very interesting data. And I agree. Trump’s tariff stupidity may now well tank the economy, notwithstanding the favorable AI supply side tailwinds. By destroying supply chains cross countries and fueling inflation, the Trump tariffs have unleashed a large stagflationary shock to the economy, reducing expected consumer spending and capex, while increasing expected inflation. Right now you can see the shock only in consumer sentiment data (see the February Michigan data), but soon we may see the Trump recession + inflation in actual data.
It could backfire but in the quest for fairness it is worth a try IMHO. The EU has had a tariff of 10% on USA car imports, we have a 2.5% tariff on EU car imports. Is that fair? Should we try and change it? It affects all our workers who make cars and consumers who buy cars (even if those cars bought are not imports).
Tariffs = inflation increase
Are there examples? What happened last time Trump placed tariffs on China?
Strictly mathematically this might be true however in the real world there are many variables which will impact the economics and not follow the strict math formulas.
Good points, and I will add, what about what we don’t know, but Trump probably does? We only know, let’s use China, what they tell us. Once forced to show us, it might be a very different story, but that of course also applies to us too!
Not knowing the whole approach, makes the plot intriguing to be sure, because if it were to work, WOW!!! We may very well see, in short order, what way the wind will blow, and how hard the gust will be…
There are plenty of counter examples. Just look at countries who have imposed tariffs on us for decades.
You know, there are people in the top 10% who came from very modest backgrounds. They worked their way up. This is a continual flaw in such short-sighted diatribes – that there is no movement between wealth percentile groups. But this is exactly what the US is all about.
“Keep playing football, Billy, and someday you can be in the NFL too”
Agreed. Top 10% sounds like you should be rubbing shoulders with the elite but in reality at 250K household income you are just talking about a husband and wife each earning 125K a year. That’s just a regular middle class job (engineer (software/electrical etc) , accountant, lawyer, mid level manager etc).
You only need $250k if you want to live live the people at the top.
You need a lot more than that, especially in the major metro areas.
So you are suggesting all my fellow Chicago residents make $250k a year, cause someone is living here ….
Depends on what part of the city, or if in the suburbs, and which one.
Dont forget tax refunds in a lot of these cases. Someone is having the kids and getting the mortgages.
… but mostly they got it from daddy like me and Reek did.
Social mobility (defined as the extent to which a person’s income or social status differs from that of their parents) is by now in Western Europe much higher than in America. A US child born into the bottom quintile of the income distribution has almost no chance to end up in the top quintile. Most researchers believe this increasing lack of upward mobility is related to how the US education and health care systems works nowadays.
And how much of the success achieved was done through playing the system, scalping money through NGO’s and such? I wouldn’t be surprised if the total was over 50%.
Hogwash. The vast majority of successful people just happened to be in the right place at the right time and had right personalities to be able to brown nose effectively.
The next phase is the top 10% normalizing household servants. And not illegal immigrants. Hey, my grandmother was a scullery maid for the Vanderbilts. Why not. Or the peasants say enough is enough and a) kinetic future b) leftist demagogue supported of course by the NatSec state behind the curtains, a younger Bernie. If b) then refer back to a)
Household servants are common in places like India.
… and you can poop wherever you feel like it there!
A job is a job and it can keep you and your family fed and housed.
Your final point is interesting. Melody Wright @m_3melody on X was writing about this issue at least a year ago, detailing how the helicopter cash along with other behind the scenes changes had artificially propped up credit scores. And, to the point you made, once the student loan issue got sorted out the possibility existed that millions could see their scores fall dramatically, with the obvious consequences not just to their own financial circumstances, but to the economy as a whole.
Are these loans recourse loans as well? I believe so, and that means they owe it period, so it will be paid black, minus a very few instances where it may not have to be.
So if they have any collateral, expect it to be frozen, so that’s useless to them now, or they get what’s left, if they choose, and that appears to be very little if anything.
This could have long Lasting credit issues for many a borrower. This applies to “Co-Signers” as well. Mom and Dad OR Grandma and Grandpa could also have their assets frozen for payment. So that’s another large sector of the population, that owns homes and the like, that may not have what they thought they did, all of a sudden.
Melody is good, I follow her Substack as well.