Today, I want to take a break from my usual coverage of financial markets and instead discuss the financial health of Main Street America.
Because, unfortunately, times are tough for millions of Americans…
Take a look at the Federal Reserve’s latest Quarterly Report on Household Debt and Credit.
In the second quarter of 2025, Americans’ total debt – mortgages, home equity revolvers, auto loans, credit cards, student loans, and personal loans – climbed to $18.39 trillion. That’s up nearly $200 billion from the previous quarter and at yet another all-time high.
Now, growing personal debt alone may not signal a problem. Individuals, like businesses, can use new debt wisely for investments or to consolidate other debts and improve their balance sheets.
However, debt does become a problem when a borrower can’t service it. And this is exactly what’s happening across America today:
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The number of borrowers 120-plus days late on payments is at a decade high.
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New delinquent balances – those 30-plus days in arrears – are the highest in over a decade.
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The number of new foreclosures plus bankruptcies is at the highest level since the first quarter of 2020, when COVID was ripping through America.
It’s heartbreaking to see so many people struggle this way. If you’re a regular reader of Wide Moat Daily, you’ll recall I’ve been through severe financial distress myself… with a wife and five children to support.
So, I’m not just sympathetic to these families. I actually know firsthand what they’re going through, and I sincerely hope things turn around for them.
Fortunately, I’m quite confident they will. Believe it or not, there are real reasons out there to be optimistic about Main Street America.
A Resurgence of Prosperity, Industry, and Resiliency
U.S. Treasury Secretary Scott Bessent recently said, “Wall Street has had a great run, and now it’s Main Street’s turn to also participate.”
This perfectly summarizes my first reason for optimism: The Trump administration’s policies to promote prosperity for all Americans.
The current administration’s prosperity formula isn’t a secret. Nor is it complex. According to Bessent, to fix America’s affordability crisis, the Trump team is working on:
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Bringing down inflation
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Raising real wages
Seven months into President Trump’s second term, both parts of the plan are already working.
In May and June, the Consumer Price Index hit a four-year low. And while we did see numbers increase in July again, there’s good reason to believe that figures will start heading back down again as Trump’s various trade agreements begin to take affect and businesses everywhere grow accustomed to the new norm.
As for wages compared with that inflation, they were up nearly 2% for hourly workers in Trump’s first five months. And I have no doubt that real wage growth will continue this year and beyond.
Take manufacturing, an industry that employs a significant chunk of the American workforce. According to the Bureau of Labor Statistics, the average hourly wage in manufacturing was $35.25 in May, up from $34.08 in July 2024, according to the U.S Bureau of Labor Statistics.
For the thousands of new manufacturing employees – and the tens of thousands still to come under Trump’s plans – America’s industrial renaissance could easily provide the financial security they’ve been struggling to obtain.
Jobs Are Flowing Back to the U.S.
That brings me to my second reason for Main Street optimism: This administration has America either partnering with allies or reshoring high-paying jobs in strategic industries like steel, pharmaceuticals, and semiconductors.
U.S. Steel, once the world’s largest steel producer, is the symbol of America’s industrial decline over the past few decades. But U.S. Steel still had value, and Japanese-based Nippon Steel recognized this.
That’s why it attempted a buyout in December 2023. Though it wasn’t until June 2025 that President Trump authorized the deal… with some significant caveats.
For one, he negotiated the authority to name a board member. For another, he made sure to acquire a golden share that gives the U.S. government veto power over Nippon Steel’s corporate actions.
This ensures U.S. Steel jobs and production will remain in Pittsburgh, Pennsylvania, ready to rebuild America’s aging infrastructure, among other projects.
We also have to consider how U.S. tariffs will soon start to hit drugmakers. Last week, Trump announced up to 250% tariffs on imported pharmaceuticals, which could increase pharma’s $250 billion pledged so far to expand their U.S. manufacturing facilities.
So again, that means more jobs created for Main Street America.
And finally, part of the global semiconductor supply chain should be coming to America before long. Right now, over 60% comes from Taiwan. But Trump announced on August 6 that he will be imposing a 100% tariff on imported computer chips.
We still don’t know exact details about how and when this will be rolled out. But those could be coming any day now.
To dodge Trump’s tariffs in general, Nvidia (NVDA), Micron Technology (MU), Taiwan Semiconductor Manufacturing (TSM), and other such companies have already announced investments in America. And I expect those plans will solidify – and even expand – further as the particulars of the computer-specific tariffs come to light.
Once again, this all means even more jobs are headed back to the U.S.
This kind of activity automatically pays dividends. Greater job opportunities, higher pay, and lowered cost of living all add up to an emboldened citizenry – one that’s more willing to work, innovate, and encourage economic growth.
Not to mention pay off debt and bounce back from financial ruin. That’s the future I see for Americans.
Regards,
Brad Thomas
Editor, Wide Moat Daily
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