Biden's economy caused consumers to pawn their possessions just to handle their debts
Latino voters in Arizona discuss rising cost of living in Biden's economy ahead of election
Latino voters in Arizona discussed inflation and the high cost of consumer goods under President Biden in an interview with CBS News on Wednesday.
Monkey See. Monkey Do. It’s an old saying that implies the act of imitation, usually with limited knowledge and concern for the consequences. And Americans are following the government's lead closely by spending far beyond their means, racking up more than $1 trillion dollars of credit card debt with an average of $5,733 per credit card holder.
The only problem is that Americans don’t have an unlimited printing press like the government does and pawn shops across our country are telling the real story of what’s happening in this economy. A pair of brass knuckles and a gold nugget are necessary just to make next month’s rent.
President Joe Biden and the White House are telling America that the economy is booming. The challenge is that most Americans aren’t concerned about ‘the economy’ but instead, they are concerned about their personal economy.
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Right now, the best forecast for most American’s family finances is cloudy with a chance of meatballs. Here are a few highlights of the gloomy Bidenomics forecast:
More than than three-fourths of Americans now live paycheck to paycheck. That's a huge increase from just a year ago. (Joy Addison/Fox News)
- A 2023 survey conducted by Payroll.org highlighted that 78% of Americans live paycheck to paycheck. That’s up almost 10% from a year ago.
- Auto loan delinquencies have hit a 13-year high in 2024. That’s the highest rate since the last quarter of 2010.
- Student loan debt is at $1.74 trillion in 2024.
- Year over year, hardship withdrawals from 401(k)s are up 36%.
What can pawn shops tell us about the state of the economy in America that cannot be told by The White House? Most Americans don’t have $1,000 in a bank account and still 20% of Americans don’t even have a bank account.
Pawn shops often act like a rainy-day fund for those who don’t have a bank account, a credit card or are falling woefully behind on their bills.
Pawn shops across America say right now they have a glut of inventory. When there are fewer buyers than sellers, it’s a clear sign that lower- and middle-class families just don’t have enough money to get by and pay their bills.
Loans typically last 30 to 90 days, but right now customers are pawning and not coming back to reclaim their rings or belt buckles. It paints a story of many families who are getting deeper and deeper into a black hole of debt.
Supporters of student debt forgiveness demonstrate outside the Supreme Court on June 30, 2023, in Washington, DC. (Photo by OLIVIER DOULIERY/AFP via Getty Images)
Here's some insight on why people are so gloomy about the economy. In December 2023, wages were reported to be up by 4.3% year over year.
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Remember, those are pre-tax wages. By the time hard-working middle-class Americans pay federal, state, Social Security, and Medicare tax, they are barely up 3.0% in real after-tax wages. When you factor in inflation year over year, most middle-class families are going backwards.
It's also hitting retired Americans, whose 3.2% cost of living adjustment in 2024 just simply isn’t enough after taxes to keep pace with inflation. With gold hitting an all-time high of $2,200 an ounce, FirstCash Holdings, Inc., one of the largest publicly traded pawnshop corporations, reported record pawn receivables and a 10% increase in inventory.
Pawn shops often act like a rainy-day fund for those who don’t have a bank account, a credit card or are falling woefully behind on their bills.
This data tells us that the cost of basic food, eating out and basic entertainment are sending people into a tailspin of debt that many won’t recover from without some type of personal bailout. Better hope your grandfather or grandmother doesn’t have to pawn off the family heirlooms to pay for rent or long-term care.
How much longer will the Biden administration continue to live in a state of denial that the economy isn’t actually working for most of us? Debt levels have never been higher, delinquency rates are spiking, and now pawn shops are hitting record levels of inventories.
Some of us may feel like a king or queen in this economy, but for many people it’s pawn to pawn and proof that Bidenomics isn’t working for most hard-working families across America.
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Ted Jenkin is CEO and co-founder of Oxygen Financial and president of Exit Stage Left Advisors.
