Even as prospects for the American economy brighten, consumers are about to face a new financial burden: a sustained period of rising interest rates.
That, economists say, is the inevitable outcome of the nation’s ballooning debt and the renewed prospect of inflation as the economy recovers from the depths of the recent recession.
The shift is sure to come as a shock to consumers whose spending habits were shaped by a historic 30-year decline in the cost of borrowing.
Consumer indebtedness has become a trope by now. What is not widely realized by market commentators cheering a recovery is that consumers will not be able to lead future GDP growth if higher interest rates choke off their credit.
How do you think Joe Six Pack will take this news? Probably with a snore until he sees his credit card bill in November and decides to cut back on Christmas spending. That's just as well if Joe no longer has a house where he can store all of those holiday goodies he really doesn't need. See, rising mortgage rates will put even more homeowners underwater. Will Joe notice that? You betcha.
The article above will soon be a meme, building on the meme of a declining standard of living for residents of the American Empire.
