While the White House lectures on the strength of the economy, Americans are drowning in credit-card debt, which hit a record high $1.13 trillion by the end of last year.

Of course Americans are sour on the economy: they’re having to put necessities on credit cards that charge $240 billion in interest annually. How we got here is a lesson in failed government policy.

Excessive government spending over the last four years has created nothing short of a cost-of-living crisis, which has left families mired in debt. When the government spent, borrowed and printed trillions of dollars, that devalued the dollar, causing inflation. Every American’s paycheck and savings lost value and could buy less.

From January 2021 to June 2022, real (inflation-adjusted) average weekly earnings fell 5.1%. By January 2024, three years after Biden took office, real earnings were still down 4.4%. The real value of the typical American family’s weekly paycheck fell $85 over that time, despite growing $270.

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With 60% of families living paycheck to paycheck, many people had to get second or even third jobs to make ends meet. While that increases payrolls and makes the monthly jobs numbers look great, it’s actually a sign of impoverishment, not wealth. Many families also fell into debt, relying on credit cards to pay for necessities like rent, groceries and utilities.

That has caused credit-card balances to soar to a record $1.1 trillion as almost half of Americans are unable to pay off their purchases at the end of each month. And it’s not just a one-time surge of borrowing from Christmas shopping a couple months ago. In fact, a quarter of card-holders still have debt from their 2022 holiday shopping.

It gets worse. Many Americans racked up credit-card debt when they had interest rates at or near 0%. With the expiration of those introductory offers and the rapid rise in interest rates over the last few years, financing costs on credit cards have shattered previous records.

The combination of record-high credit-card balances and interest rates means Americans are now paying $240 billion annually just in interest, before they pay a single dime on their outstanding balances. That’s an additional cost on top of the existing stratospheric increases in their cost of living.

Sadly, many families are falling into debt traps where they cannot afford to pay their existing expenses, let alone additional finance charges. They must take on more debt not only to pay today’s bills but also to pay the interest on yesterday’s borrowing. That’s a downward spiral ending in disaster.

Since today’s higher interest rates are a response to the 40-year-high inflation, runaway government spending has delivered a one-two punch to family’s finances: It causes inflation that necessitates borrowing, and it makes that borrowing more expensive.

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But the damage caused by the government has been internal as well as external. The federal debt has exploded about $6.5 trillion since January 2021 to an eye-watering $34.2 trillion. Interest on the debt now costs taxpayers over $1 trillion annually—over 40% of all personal income taxes.

That’s not fixing roads and bridges, funding schools, maintaining airports, or funding the military; it’s just servicing the debt.

Last year, I projected that interest would consume a record percentage of our economy by 2025 and the nonpartisan Congression Budget Office has just agreed with that forecast. Politicians have racked up so much debt on the nation’s credit card that interest will soon be the federal government’s biggest expense.

But the politicians can lean on the Federal Reserve to create more money for them. American families don’t have that luxury. Instead, that money creation causes more inflation, putting families right back on the hamster wheel where they work harder, but fall further behind.

That’s a key to understanding why Americans view the economy so unfavorably in polls. The last three years have taken them backwards financially, even as their salaries increased.

This will continue if Washington maintains its prodigality. Every time the federal budget increases, the family budget decreases.