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As Inflation Soars Under Trump, US Families Face Record High Household Debt
"These numbers tell the real story," said one campaigner. "His administration has failed to address—and in many cases, worsened—an historic cost-of-living crisis that is crushing everyday Americans."
May 12, 2026
While inflation hit a three-year high on Tuesday and President Donald Trump publicly confessed that he doesn't consider how his illegal war on Iran impacts Americans' finances, a Federal Reserve bank revealed that US household debt has risen to a record high of $18.8 trillion.
The Federal Reserve Bank of New York's Center for Microeconomic Data found that household debt increased by $18 billion in the first quarter of this year.
It specifically found that by the end of March, mortgage balances increased by $21 billion to $13.19 trillion, home equity line of credit balances jumped by $12 billion to $446 billion, and automobile loan balances rose by $18 billion to $1.69 trillion.
The center further found that "while student loan balances remained essentially flat, decreasing by $6 billion and standing at $1.66 trillion," the delinquency rate "increased to 10.3% of balances 90+ days delinquent, up from the 9.6%" in the last quarter of 2025.
The analysis notes that credit card balances dropped by $25 billion to $1.25 trillion, a seasonal decline that generally occurs after the winter holidays. However, in its coverage of the New York Fed's findings, CNBC highlighted another report out Tuesday that shows how Americans are struggling with current economic conditions.
As CNBC detailed:
More than half—53%—of consumers carry credit card balances to cover essential expenses, according to a report released Tuesday by debt management company Achieve.
"For many households, higher balances are less a sign of economic optimism and more a sign that wages and savings are struggling to keep pace with essential expenses like groceries, utilities, and housing," Austin Kilgore, analyst for the Achieve Center for Consumer Insights, said in a statement.
Among respondents in Achieve's survey of 2,000 consumers, 57% of borrowers said it would take six months or longer to pay off all their credit card debt.
According to ABC News, "On a call with reporters Tuesday morning, researchers at the New York Fed described Americans' overall credit as 'stable,' but noted there are weaknesses among younger consumers and lower-income households."
Mike Pierce, co-founder and executive director of the advocacy group Protect Borrowers, was far more scathing, declaring in a statement that "working families are at a breaking point and desperately need relief. Instead, President Trump is bragging about his plans for a new White House ballroom while his head economist touts families' surging debts as a sign of a booming economy."
"These numbers tell the real story: Trump's economy has driven up costs," Pierce continued. "His administration has failed to address—and in many cases, worsened—an historic cost-of-living crisis that is crushing everyday Americans under stagnant wages and rampant price gouging by grocery conglomerates, data centers, corporate landlords, and private equity firms."
"Making matters worse, Trump's war with Iran is pushing inflation to record levels and forcing Americans to feel the economic pain at the pump," he added, as gasoline prices topped $4.50 a gallon on Tuesday. "It is clear that President Trump is not only failing to 'Make America Affordable Again' but is actively pushing millions of families further into the red."
Last week, Pierce's group and The Century Foundation published an analysis about soaring US auto loan debt. Report co-author and Protect Borrowers senior fellow Tara Mikkilineni said at the time that "for millions of working families, a car is not a luxury, it is an essential economic lifeline. Working families deserve relief, and they deserve to have a government that is watching out for them, not allowing lenders and auto dealers to rake in record profits at their expense."
Meanwhile, Trump—who is facing intense disapproval from the US public, particularly regarding the economy—has repeatedly made clear he doesn't care how his policies, from sweeping tariffs to the Iran War, impact Americans' pocketbooks.
Trump's assault prompted Iran to restrict ship traffic through the Strait of Hormuz, a key trade route, which has driven up the prices of fossil fuels worldwide. Speaking with journalists outside the White House last month, Trump suggested that $4 a gallon for gas is "not very high."
Asked about the war's impact on the US public's finances again on Tuesday, Trump said that "the only thing that matters when I'm talking about Iran—they can't have a nuclear weapon. I don't think about Americans' financial situation. I don't think about anybody. I think about one thing—we cannot let Iran have a nuclear weapon. That's all."
Those remarks came just hours after the latest consumer price index from the US Bureau of Labor Statistics, which shows that prices increased by 3.8% on an annual basis in April—above economists' expected 3.7% jump—and the cost of living rose above average monthly wage gains. Various experts responded by taking aim at the president.
University of Michigan economist Justin Wolfers said that "Trump campaigned on bringing down the cost of living 'starting on day one,' and then: started a trade war; deported much of the farm workforce, bombed Iran, allowed healthcare subsidies to expire, cut food assistance, ran an interest-rate boosting deficit, and attacked Fed independence."
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It's Crucial to Follow the Money on the National Debt
The point is that a big chunk of the growing interest payments American taxpayers make on the federal debt is going to wealthy Americans.
May 11, 2026
The U.S. national debt just crossed a once-unthinkable threshold on the way toward breaking the record set in the wake of World War II: It now exceeds 100 percent of America’s gross domestic product.
As of March 31, our publicly held debt was $31.27 trillion, while America’s GDP in 2025 was $31.22 trillion. This puts the ratio at 100.2 percent, compared with 99.5 percent when the last fiscal year ended September 30.
That 100.2 percent figure will likely climb, because the federal government is running historically large annual deficits of nearly 6 percent of GDP, which add to the debt. The final tally will depend on Iran war spending, tariff refunds, and the strength of the economy.
Should you worry? Well, it’s not as if we’re heading into a depression. Passing the 100 percent threshold won’t suddenly cause the world to lose confidence in the dollar.
The real problem is that an increasing portion of our nation’s budget—and your tax dollars—is dedicated to paying interest on this growing debt. That’s money we don’t spend on education, healthcare, roads and bridges, social safety nets, or (if we actually needed more spending on it) national defense.
As the debt continues to grow, interest payments continue to soar. We’ll soon be paying more in interest on the federal debt each year than we spend each year on Medicare.
So, who exactly receives these interest payments? This is an issue you hear very little discussion about, because the wealthy and powerful of this country would rather you didn’t know.
You probably do hear that a chunk of our debt is held by foreign governments and foreign investors. That’s true, but they hold only about 30 percent of our debt. The rest—roughly 70 percent—is held domestically. That is, we pay the interest to ourselves.
And who, exactly, is the “ourselves” who receive these interest payments? The Federal Reserve holds part of this debt, state and local governments hold part.
But the biggest chunk—nearly half—is held by mutual funds, pension funds, insurance companies, and banks. And who owns them? The Americans who invest in these funds—and who thereby, directly or indirectly, hold Treasury bills.
And who, exactly are these Americans—the Americans who are directly or indirectly collecting a large amount of the interest we’re paying on the national debt? It’s the people at the top.
The richest 1 percent of U.S. households hold about 35.6 percent of all financial assets—shares of stock, corporate bonds, and Treasury bills—so it’s safe to assume they hold at least a third of all Treasury bills.
What’s wrong with this picture?
Here’s where things get really interesting.
Decades ago, wealthy Americans financed the federal government mainly by paying taxes. Their tax rate was far, far higher than it is today. In the 1950s, under President Dwight Eisenhower, the richest Americans paid a marginal tax rate of 91 percent. (Tax deductions and tax credits meant that the top effective marginal rate was lower than this.)
Fast forward. Now, wealthy Americans finance the federal government mainly by lending it money and collecting interest payments on those loans.
Interest payments on the national debt this year are expected to reach $1 trillion.
There are roughly 128 million households in the United States. Dividing $1 trillion in annual interest among U.S. households would amount to $650 per household per month. (This is a simplified average, of course; actual burdens vary based on tax status, income, and spending.)
The point is that a big chunk of the growing interest payments American taxpayers make on the federal debt is going to wealthy Americans.
Keep following the money. One of the biggest reasons the federal debt has exploded is that tax cuts—starting with the George W. Bush administration in 2001 and extending through Trump’s 2018 and 2024 tax cuts—have reduced government revenues by $10.6 trillion.
Most of the benefits from those tax cuts are going to the wealthy. Since 2000, 65 percent of the benefits from tax cuts have gone to the richest fifth of Americans—22 percent to the top 1 percent.
So, you see what’s happened?
The wealthiest Americans used to pay higher taxes to finance the government. Now, the government pays wealthy Americans interest on a swelling debt, caused largely by lower taxes on wealthy Americans.
Which means a growing portion of everyone else’s taxes are now paying wealthy Americans interest on those loans, instead of paying for government services everyone needs.
So, from now on, whenever you hear someone say how huge, horrible, and out-of-control the national debt is, explain to them that it’s because of tax cuts to the wealthy—who are also the major recipients of interest on that debt.
America’s wealthy have never been wealthier. If they paid their fair share of taxes, we wouldn’t have such a huge federal debt. And we wouldn’t be paying them so much interest on that debt.
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As Trump Drives Up Gas Prices and Trashes Economy, US Auto Debt Hits Record High
"Reckless actions on the economy and the expensive fallout from the war in Iran has made it harder for working families to purchase a car and has left millions more feeling major pocket pain at the pump," one researcher said.
May 06, 2026
As Americans on Wednesday continued to face the economic fallout of President Donald Trump's war on Iran, a gallon of gasoline cost $4.536, the average transaction price for a new vehicle was $49,275, and a pair of progressive groups published a report detailing "how surging auto loan debt is hurting households."
"The costs of purchasing and financing a car have been going up for years," noted Protect Borrowers senior fellow Tara Mikkilineni, who co-authored the report, "When The Wheels Come Off," with other experts from her organization and The Century Foundation.
"Unfortunately, the Trump administration's reckless actions on the economy and the expensive fallout from the war in Iran has made it harder for working families to purchase a car and has left millions more feeling major pocket pain at the pump," Mikkilineni said. "For millions of working families, a car is not a luxury, it is an essential economic lifeline. Working families deserve relief and they deserve to have a government that is watching out for them, not allowing lenders and auto dealers to rake in record profits at their expense."
Mikkilineni's team found that "in recent years, aggregate total auto debt has reached $1.68 trillion, a 37% jump since early 2018, and now comprises the largest volume of outstanding loan debt ever recorded. At the end of 2025, nearly 86 million Americans—roughly 28% of consumers—have outstanding auto loan or lease debt. Residents in states where driving is most necessary, such as Texas, Alaska, Louisiana, and Florida, are struggling with the highest levels of auto debt."
"Borrowers carrying auto loans see significantly higher and faster credit card balance growth—regardless of income level—suggesting that auto debt cascades into broader financial pressure," according to the report. Specifically, "between early 2018 and late 2025, credit card balances for middle-income borrowers with auto debt surged by 31%, while those without auto loans saw a notably lower growth of 17%. Borrowers with extended-length auto loans are carrying monthly balances on their credit cards that are 190% of (that is, nearly twice) their monthly income."
"At the end of 2025, the average origination balance for an auto loan reached $33,519, an amount $10,000 higher than the average in 2018, due to massive increases in the price of even the most basic cars and a shortage of 'affordable' car models," the publication explains. "Borrowers are also facing higher interest rates. Today, the average annual percentage rate (APR) for auto loans is nearly 10%, up from 7.5% in 2018."
Financially vulnerable borrowers are being hit particularly hard by current conditions. The researchers found that for those with the most limited access to credit, "the average APR is up to 18.7%, which means a six-year loan on a $30,000 car will cost $20,000 in interest alone. Furthermore, Black, Hispanic, and American Indian and Alaska Native borrowers face higher interest rates than their white and Asian counterparts."
NEW from @cnbc.com: Auto debt is crushing families. Our new report with @borrowerjustice.bsky.social shows that 86 million Americans owe a staggering $1.68 trillion in auto loan debt, with auto debt now reaching the highest level ever recorded. www.cnbc.com/2026/05/06/c...
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— The Century Foundation (@tcfdotorg.bsky.social) May 6, 2026 at 10:24 AM
Affordable vehicles are also harder to find these days. Sean Tucker, a managing editor at Kelley Blue Book, told CNBC that "in 2017, [automakers] built 36 models priced at $25,000 or under... Today? Four."
Tucker said that a "record" share of new cars—over 43%—are now bought by households with incomes of at least $150,000. According to him, "Automakers are serving that market."
Angela Hanks, another report co-author and chief of policy programs at The Century Foundation, stressed that "for the overwhelming majority of working families, a car is a necessity—yet purchasing a car has become a financial trap, eating up more of people's paychecks than ever before."
With so many US communities lacking quality public transit, some US families in need of a vehicle turn to loans with longer terms. The report points out that "for these borrowers, even after taking on these riskier products with additional lifetime costs, auto loan payments are still nearly 20% of their monthly income, meaning nearly $1 out of every $5 they earn will go toward car payments over the seven years of their loan."
Hanks highlighted that "while families drown" from costly, extended-term loans, "the Trump administration is refunding big businesses for the tariffs that consumers paid, with interest."
The Trump administration last month launched a portal designed to facilitate refunds for around $166 billion in tariffs that the US Supreme Court struck down as unconstitutional, but only businesses that directly paid the import taxes are eligible, even though companies largely passed on the cost hikes to consumers.
Meanwhile, the president responded to the high court's decision by imposing temporary import taxes, and his administration is pursuing "plan B," holding hearings required to impose tariffs under Section 301 of the Trade Act of 1974, a different legal authority than the one Trump used last year.
The new report concludes by calling on US policymakers to act: "Amidst the growing affordability crisis, Americans deserve urgent action to bring down costs and rein in profiteering from the dealers and lenders who have been allowed to get away with nickel-and-diming working families for far too long."
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