Financial experts noted several ominous economic indicators, including skyrocketing student loans and U.S. household debts, that could predict a crash “worse than the Great Depression,” according to a report in the New York Post.
Goldman Sachs predicted that this year’s U.S. fiscal outlook would be “not good,” and that U.S. household debt had been increasing since the 2008 housing crisis led to American taxpayers bailing out the big banks.
In 2018, experts said, a $247 trillion global debt will be the greatest cause of the next cataclysmic financial crash. Additionally, low wages and the U.S. national debt’s steady rise are expected to drag down the economy.
Economists downplayed recent positive indicators such as low unemployment and soaring business confidence, reiterating they wouldn’t last through Trump’s first term. At least one expert predicted that recent slides in housing and auto sales were the first step toward a U.S. recession.
Murray Gunn, chief of global research at Elliott Wave International, told the Post, “We think the major economies are on the cusp of turning into the worst recessions we have seen in 10 years. Should the [U.S.] economy start to shrink, and our analysis suggests that it will, the high nominal levels of debt will instantly become a very big issue.”
Experts cautioned that several economic markers had gotten much worse over the past decade, especially in regard to borrowed money. The U.S. household debt of $13.3 trillion is now far worse than it was during its 2008 peak, due primarily to mortgage lending.
Outstanding student loan debts have simultaneously increased from $611 billion of unpaid debt in 2008 to more than $1.5 trillion today. Automobile loans have far exceeded their 2008 peaks, sitting at about $1.25 trillion today, and unpaid credit card balances are just as high as the years leading up to the Great Recession.
Central bankers have also more than doubled global debt as they flooded national economies with cheap and easy money. In 2008, global debt sat at $177 trillion, in comparison to $247 trillion today.
“We won’t be able to call it a recession, it’s going to be worse than the Great Depression,” economic commentator Peter Schiff told the Post. “The U.S. economy is in so much worse shape than it was a decade ago.”
A widespread drop in spending and income means that default rates will likely worsen in coming years. Schiff also blamed the U.S. Federal Reserve and other central banks in part for the impending crisis.
“I think we are going to have a dollar crisis—you think the Turkish lira looks bad now, wait till you see when the dollar is imploding and we have a sovereign debt crisis in the U.S.,” Schiff told the Post. “The U.S. government is going to be given a choice between defaulting on the debt, or else massive runaway inflation.”