Wallet Watch

The Progress Report published a special on credit card debt as the next financial disaster on Monday March 3rd:

http://www.americanprogressaction.org/progressreport/2008/03/pr20080303

The economy is undergoing a “slowdown” according to President Bush, a “recession” according to 61 percent of Americans. Regardless of the name, 83 percent of Americans rate the economy as only fair or poor, “and almost two thirds are pessimistic now and about the future.” One large source of economic stress is the credit crisis, which has spread from the subprime mortgage sector to the U.S. credit card market. “If America’s $14 trillion economy is a high-powered engine, credit is the motor oil that helps it run smoothly. When the lubricant is in short supply, the economy — like an engine — is more prone to knocks and stalling.” “The squeeze is reaching beyond Wall Street to Main Street, hitting everything from the availability of student loans to credit-card interest rates to the prices of municipal bonds in retirees’ portfolios.” Today, the Washington Post reports that college students will see higher costs for loans — and “some students may be denied private loans entirely” at community and for-profit schools — because of the credit crisis. Chairman of the Federal Reserve Ben Bernanke acknowledged last month that the credit crunch is fueling the economy’s downturn. “More expensive and less available credit seems likely to continue to be a source of restraint on economic growth,” he said.