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Corn+Soybean Digest

Credit Card Debt

Many of the so-called experts are forecasting a recovery indicating that there are green sprouts emerging in the economy. One of the major issues facing the economy both in the short and long run is credit card debt levels of younger and older generations.

Unemployment rates will continue to increase, possibly nearing 10% or higher later this summer. However, the reported unemployment rate does not include discouraged workers, those not on unemployment payments and those with reduced hours. The actual unemployment rate including these factors could reach 15%. Fewer people employed, combined with the inability to utilize home equity loans liberally because of declining asset values, presents the second storm front in this economic crisis.

According to a recent presidential speech, the average credit card balance of the 78% of Americans who have balances is $10,716. Recently, my discussions with agrilenders have found balances ranging from $25,000 to $125,000. With fewer jobs and more American farmers and ranchers depending upon non-farm income, the vortex for future problems even in a resilient agricultural and rural sector is a distinct possibility.

The implication of this is that more agrilenders may be requesting both business and personal balance sheets and financial statements.

Watch List
Two storm fronts for the U.S. economy are the aforementioned credit card debt and declining real estate values, and the ripple effect in rural America of the closing of auto dealerships.

Editor’s note: Dave Kohl, Corn & Soybean Digest trends editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at

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