As U.S. household debt hits a record $18.59 trillion in 2025, a new analysis reveals how mortgages, auto loans, and student debt are trapping millions in a cycle of financial strain. Zhu Chenge and Jia Jiameizi, researchers from the Chinese Academy of Social Sciences, examine the systemic pressures undermining economic stability.
The Mortgage Burden: Amplifying Inequality
Mortgages account for 70% of household debt, with African American families facing housing cost burdens 10 percentage points higher than white households. Over 540,000 consumer bankruptcies were filed in 2025, driven largely by unaffordable repayments amid stagnant wages and rising inflation.
Auto Loans: A Debt-for-Debt Cycle
Auto loans now trap 20.3% of new car buyers in monthly payments exceeding $1,000. Trade-ins frequently leave owners owing more than their vehicle’s value, forcing them to roll deficits into new loans—a practice locking families into perpetual debt.
Student Loans: Risking Futures
With 43 million Americans holding federal student debt, nearly half are in default. Graduates increasingly prioritize repayment over career growth, as average balances of $30,000–$40,000 jeopardize long-term financial security.
This trifecta of debt highlights a consumerism crisis eroding the American Dream, where systemic inequality and capital-driven consumption patterns perpetuate instability.
