Recession concerns persist as household debt nears $16 trillion
Center for Freedom and Prosperity co-founder Dan Mitchell discusses household debt concerns and the state of the market.
The new US household debt numbers show that Americans have borrowed higher and higher amounts of money every quarter for the past five consecutive years. Collective household debt has surpassed $14 trillion for the first time. RT America's Sayeh Tavangar reports before John Grace of founder and president of Investor's Advantage Corp and author of "Making Finance Make Sense" joins Rick Sanchez to weigh in. He argues that "the debt level is enslaving Americans" and that "sooner or later, the music stops." RT producer Joe Ricci reports on Syria's recognition of the Armenian Genocide before Aram Hamparian of the Armenian National Committee shares his insights. What happens to the bodies of those infected with the deadly COVID-19, formerly known as novel coronavirus? RT America's Natasha Sweatte reports. RT's Eisa Ali reports from London on the BBC's struggle for relevance as they face declining viewership and numerous scandals before nationally syndicated journalist and podcast host Ruben Navarrette weighs in on the muddled state of US media.
#QuestionMore #RTAmerica Former telecoms and postal workers in the Republic of Congo say the government is unable to pay them what they are owed.
Money they paid into their pension funds each month has disappeared.
The country has nearly gone bankrupt three times in the past 20 years and has been repeatedly bailed out by the International Monetary Fund, despite being Africa's third-largest oil producer.
Al Jazeera's Malcolm Webb reports from Brazzaville. The numbers of coronavirus infections in New York State just keep getting worse.
It now has more than 100,000 cases, not far behind Italy and Spain.
And Governor Andrew Cuomo is pleading for more medical supplies.
Cuomo said that the National Guard are going to be deployed to redistribute ventilators across the state.
Al Jazeera's Kristen Saloomey reports from New York. New York City at the center of the coronavirus outbreak in the U.S., Mass General taps into emergency supply stockpile as cases surge, and pandemic changes how the world worships.
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CONNELL: ALREADY AT THAT LEVEL. THANK YOU. JACKIE DEANGELIS. DOES THE U.S. HAVE A LOOMING DEBT CRISIS TO DEAL WITH? HOUSEHOLD DEBT IS UP TO $15.99 TRILLION. NOT QUITE 16, RIGHT? BUT THE GOOD NEWS THERE, IS THAT PEOPLE ACTUALLY ARE PAYING IT BACK, AS MUCH DEBT AS WE HAVE. CORPORATE DEBT IS ANOTHER ISSUE WHICH WE TALK ABOUT. CENTER FOR FREEDOM, PROSPERITY, DAN MITCHELL JOINS US. ON HOUSEHOLD SIDE, DAN, START THERE. WHAT WOULD YOU SAY ABOUT THAT, ABOUT THAT NUMBER? WE HAD A GUEST EARLIER SAYING, CONSUMER AND AMERICAN CONSUMER IS IN PRETTY GOOD SHAPE, ABLE TO PAY BACK A LOT OF WHAT THEY BORROW. NOT IN SUCH DIRE STRAITS. WHAT DO YOU MAKE OF THE NUMBER, ALMOST 16 TRILLION? >> SOUNDS LIKE A HUGE NUMBER. IT'S A HUGE NUMBER BUT HERE ARE TWO RATIOS EVERYONE NEEDS TO KEEP IN MIND. DON'T JUST LOOK AT HOUSEHOLD DEBT. ALSO LOOK AT HOUSEHOLD ASSETS. HOUSEHOLD ASSETS ARE INCREASING AT THE SAME TIME DEBT IS INCREASING. SO THEORETICALLY THERE IS NOT A PROBLEM. THE OTHER RATIO, WHAT IS HOUSEHOLD INCOME, VERSUS HOUSEHOLD DEBT SERVICE AND COSTS? YOU MIGHT HAVE LOT OF INTEREST ON THE DEBT, MONEY THAT YOU OWE. IF YOU HAVE ENOUGH INCOME COMING IN, THAT'S FINE. RIGHT NOW WITH THE ECONOMY STRONG THESE NUMBERS, THESE RATIOS ARE OKAY. BUT HERE IS THE THING WE ALWAYS HAVE TO WORRY ABOUT? WHAT IF SAY, THERE IS A BUBBLE? WHAT IF WE GO INTO RECESSION? WHAT IF ASSET VALUES FALL? HOUSEHOLD INCOME FALLS THAT THE INTEREST EXPENSE BECOMES BIG? THOSE ARE THINGS WE NEED TO BE CONCERNED ABOUT. CONNELL: WE COMPARE TO THE NASDAQ 5000 DAYS, OR NASDAQ SETTING RECORDS NOT SEEN SINCE '97, '98. BACK THEN WE DIDN'T KNOW, NOT A LOT OF PEOPLE KNEW THAT THE BUBBLES THAT WERE RECALL TOKING WERE FORMING. OR YOU COULD SAY THE SAME ABOUT 2006 UNTIL EVERYTHING WENT HAYWIRE IN 2008. IS THERE ANYTHING OUT THERE THAT DOES WORRY YOU? I BROUGHT UP CORPORATE DEBT FOR EXAMPLE, THAT SOME PEOPLE ARE STARTING TO BE CONCERNED ABOUT THAT? >> TWO THINGS I'M PERSONALLY CONCERNED ABOUT. NUMBER ONE IS SORT OF CYCLICAL. ALL THE ARTIFICIALLY LOW INTEREST RATES FROM THE FEDERAL RESERVE, OTHER CENTRAL BANKS AROUND THE WORLD, PUSHING TOO MUCH LIQUIDITY INTO THE SYSTEM. THAT CONCERNS ME THAT ENCOURAGED PEOPLE TO TAKE ON TOO MUCH DEBT. THE SECOND THING, IS MORE STRUCTURAL LONG RUN. THANKS TO FEDERAL GOVERNMENT POLICIES, WE SUBSIDIZED BORROWING AND WE PENALIZED SAVINGS. IN THE LONG RUN THAT JUST, YOU KNOW, WE WANT THOSE DECISIONS TO BE MADE ORGANICALLY UNDER, UNDERGIRDING GENUINE ECONOMIC NEEDS IN THE ECONOMY. WE DON'T WANT UNCLE SAM WITH FINGER ON THE SCALE, ENCOURAGING US TO BORROW TOO MUCH AND PUNISHING US TO SAVE. CONNELL: WE DON'T SEE ANYTHING ON THE HORIZON CHANGING THAT DYNAMIC, RIGHT? SOUNDS LIKE THE WAY YOU LOOK AT THINGS, SHORT TERM, WE'RE OKAY, THAT ECONOMY IS STRONG, CONSUMER IS STRONG. PEOPLE ARE IN A PRETTY GOOD SPOT. JUST OVER TIME THESE CONCERNS, OBVIOUSLY. JUST A MATTER OF WHEN. WE DON'T KNOW WHEN THAT WHEN WILL BE, RIGHT? >> WELL, THERE IS A LITTLE BIT OF GOOD NEWS. CONNELL: OKAY. >> TRUMP'S TAX REFORM IN 2017 SLIGHTLY REDUCED THE SUBSIDY FOR BORROWING BY COMPANIES. SO HOPEFULLY, IN THE FUTURE, THERE WON'T BE AS MUCH CORPORATE DEBT AS OTHERWISE WOULD BE. BUT BEYOND THAT, YES, THE ECONOMY RIGHT NOW IS STRONG. THE PROBLEM IS, IS THIS SAY 1984 WHERE WE HAVE SEVERAL YEARS OF GOOD STRONG GROWTH? OR IS IT 2007 WHEN WE'RE ON THE CUSP OF A BUBBLE BURSTING OR SOMETHING LIKE THAT? CONNELL: YES. >> AND FRANKLY ECONOMISTS LIKE ME WERE LOUSY FORECASTERS. IF I KNEW THE ANSWER TO THAT I WOULD BE RICH. CONNELL: WHAT DO YOU LOOK AT? WHAT SIGNS EARLY NEXT YEAR WOULD BE, A GOOD SIGN, SAY, HEY, THIS COULD CONTINUE FOR A WHILE VERSUS IF X, Y, Z, POPS UP YOU START TO BE WORRIED? WHAT ARE YOU LOOKING FOR FIRST HALF OF NEXT YEAR AS AN INDICATOR AT LEAST? >> A LOT OF PEOPLE FOCUS ON THE STOCK MARKET. THAT IS SUPPOSED TO BE A REFLECTION OF THE FUTURE PROFITABILITY OF COMPANIES. WELL, YEAH, BUT IS IT A, IS IT AN INDICATOR THAT ANY OF US ARE VERY GOOD READING? IS SOMETHING A TEMPORARY BLIP OR GENUINE CORRECTION? AGAIN, I DON'T PRETEND THAT I KNOW ANSWERS TO THAT. I FOCUS ON GOVERNMENT POLICY I WORRY ABOUT THINGS LIKE FEDERAL RESERVE KEEPING INTEREST RATES TOO LOW. I WORRY ABOUT TRUMP DOING SOMETHING SILLY ON TRADE WITH CHINA, THINGS LIKE THAT. BUT BEYOND THAT PREDICTING THE ECONOMY IS A FOOL'S GAME OR AT LEAST IT IS FOR ME. CONNELL: WHAT ABOUT THE ELECTION, IN TERMS OF PRICING OUT WHO IS THE LEADING CANDIDATE ON THE DEMOCRATIC SIDE, MIGHT BE PRESIDENT'S OPPONENT? A MONTH AGO, FOR EXAMPLE, SEEMED ECONOMISTS OR INVESTORS WERE SAYING WE'RE STARTING TO WORRY ABOUT ELIZABETH WARREN CANDIDACY OR PRESIDENCY? THAT SEEMED TO FADED AS HER STOCK FADE AD BIT IN THE EARLY STATES. DO YOU START TO LOOK AT THAT MIDWAY THROUGH THE YEAR, FIGURE OUT WHAT POLICIES MIGHT RESULT, YOU KNOW, IF TRUMP DOESN'T WIN? >> IT'S A GREAT QUESTION BECAUSE RIGHT NOW THE MACROECONOMIC POLITICAL FORECASTING MODELS AND FOR THAT MATTER, JUST MARKET SENTIMENT ON THE STREET SUGGESTS PEOPLE THINK TRUMP WILL WIN, THEREFORE WE WILL HAVE CONTINUATION. SO PEOPLE AREN'T AS WORRIED ABOUT SOME OF THE REALLY RADICAL POLICIES OF ELIZABETH WARREN OR BERNIE SANDERS. OR MAYBE, MAYBE THEY THINK THOSE TWO DON'T HAVE A CHANCE GETTING THE DEMOCRATIC NOMINATION AND THEY'RE LOOKING AT JOE BIDEN, WHILE ON THE LEFT IS NOT CONSIDERED TO BE A CRAZED, HARDCORE ANTI-FREE ENTERPRISE POLITICIAN, SO, AGAIN, IF YOU KNEW THE ANSWERS TO ALL THESE QUESTIONS, HAD POLITICAL BETTING MARKETS YOU WOULD HAVE A MUCH BETTER SENSE OF THIS. CONNELL: RIGHT. >> RIGHT NOW ALL WE CAN DO IS LOOK AND WONDER, IS THERE GOING TO BE SOME POLITICAL BOMBSHELL IN 2020? WILL TRUMP SEND OUT A TWEET THAT UP ENEVERYTHING? THAT COULD BE BOTH POLITICAL AND ECONOMIC. NO WAY PREDICTING THAT. CONNELL: AS WE LEARNED IN THE NEW CYCLE. FORGET 24 HOURS.