Eventually the piper has to be paid. Too many years of cheep money. Running this country and many others on low interest payments is a recipe for disaster. Here is what I have seen first hand being an immigrant myself. Not on the US side but from the Australia side.
In 1996 I came to the USA and noticed some key differences between Australia and here. When I went to purchase a second hand car, the salesman asked me what sort of payment could I afford. I thought wow, that is a stupid question. In Australia the question was What price range are you looking in. I didn't really take much notice and answered I am a cash buyer, I don't do credit on cars.
So I settled into my US lifestyle and went shopping for some furniture to fill my apartment. Again I saw No Interest No Payments at all the furniture stores. Everything in the store had two prices on it. The monthly payment price and the total price.
Off to Best Buy to get some electronics. Same deal, monthly prices, No Interest No Payment deals.
Started looking at houses, nobody asked what my price range was at first. It was always what payment are you looking for?
So 7 years pass and I didn't take a visit to my homeland. When I did a 3 week visit, I noticed something really strange. Not an old car on the road there anymore? I thought hey everyone is doing well... Then on the drive to my parents house, I saw car yards with nothing but Monthly Payments on the windows, Massive furnture, Electronic, Hardware Stores with banners saying Buy Now Pay later, Low monthly payments, No interest no payments for 6 months.
So instead of people having to pay cash for things now they could do it on easy finance deals. The mentality had changed. When I returned to the states, I knew this was going to be a short lived ride on the economy boom cycle. I wondered how long it could go on until everyone had maxed out their paycheck and started the spiral into bankruptcy. Well it did happen here, and guess what Australia is about to experience it as well.
Given the choice the average Joe or Kangaroo will take easy payments over a big cash layout up front. Especially if they haven't got the big cash stash to pay in full.
Mark my words here people, Australia will be the next to fall in the Over Credited Up public.
In summary, I believe it is the Easy Credit and Cheep Money that is causing the failure of our society. Once that is all shaken out and all the bad debts have been written off we can start the next solid cycle of economic expansion. Let's hope it is done with less debt this time, in reality, however, it will be cashed up on credit just like the last one.