Source: NYT > Business
The consumer credit treadmill has shifted from discretionary spending to survival. People are borrowing against future income to afford essentials, not luxuries. Household balance sheets are compressing: nominal wage growth lags core inflation, forcing middle-income earners into structural debt dependency that lenders are actively monetizing. The cycle collapses the moment rates fall or borrowing becomes unavailable, exposing a latent vulnerability in both consumer spending and financial system asset quality.