Inflation can be felt at every tax bracket. Federal Reserve Bank of Minneapolis President Neel Kashkari came out this week and said the public “viscerally hates high inflation,” and for good measure. Everyone is seeing the impacts of inflation on their quality of life. Those defined as rich, the demographic one side of the political spectrum believes must be taxed into oblivion, have not come out of this inflationary cycle unscathed, as indicated by a new report from the St. Louis Federal Reserve.
Credit card delinquencies (missing a payment by over 30 days) have been steadily rising across America. The poorest Americans experienced the hardship first, and now those in higher tax brackets are also falling behind on bills. Delinquencies have increased for the last eight to 11 quarters, as indicated by the Fed. Among the poorest zip codes in the US, delinquency rose from 11% in Q2 of 2021 to 17.4% in Q1 of 2024 or 58%. Every region in America has experienced an increase in delinquencies by AT LEAST 32.2% in relative terms.
“The richest 10% of ZIP codes have experienced the greatest proportional increase; their delinquency rate climbed from 4.8% in the second quarter of 2022 to 7.4% in the first quarter of 2024, or 54% in relative terms,” the Fed noted. “For the poorest 10% of ZIP codes, the delinquency rate increased from 14.9% in the third quarter of 2022 to 21% in the first quarter of 2024, or 41% in relative terms.”
Credit card delinquencies are now exceeding pre-pandemic levels, and the Fed believes this suggests “that a trend which began prior to the pandemic has accelerated.” Discontent will grow as people are forced to stretch their dollars and watch their quality of life decline. The discontentment is fueling this political upheaval and the people can not vote their way out of this current situation because it is becoming apparent that the elections are not fair. We the people have been discarded by our government.
These delinquencies will fall on the banks eventually. The government does not realize that reckless spending and raising taxes has an impact on absolutely everyone. The people who push for more taxes and social programs fail to realize the larger implications.
