Consumer debt in the United States is expected to reach record levels over the next decade, sending government debt soaring.
The increase in mortgage originations is partly to blame for the “faster-than-usual” rise in consumer debt. At the height of the Covid-19 epidemic, 14 million mortgages were refinanced as homeowners took advantage of historically cheap interest rates.
Mortgage debt increased by $86% since the fourth quarter of 2019 as homeowners cashed out $430 billion in equity. Eight percent of the growth is attributable to credit card debt, while three percent comes from school loans.
Meanwhile, Statista projects that the US gross national debt will expand to $51.99 trillion by 2033, up from the present US debt of $31.92 trillion, an increase of more than $20 trillion.
This month, Vice President Joe Biden signed an agreement to suspend the debt limit, allowing for more government spending for the next two years.
The New York Times reports that the federal government of the United States will add about $1 trillion to the rising national debt by September’s end.
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