I am no expert on consumer finance, but I believe that purchasing stocks using credit card cash advances and loans along with home equity lines of credit should be illegal because they are financially risky.
According to Forbes, wallstreetzen.com, and U.S. News & World Report (Money), credit card cash advances (via“Stockpile app“gift cards) and loans can be used to purchase stock, although their collective advice is pros and cons. According to Fidelity, Bankrate, and Discover, home equity loans can also be used to purchase stock, though potential investors are warned of its potential downside.
The results of losing a tremendous amount of money from stocks or mutual funds can be catastrophic for the average middle-class and upper-middle-class homeowner. This could easily ruin their credit record, possibly leading to a Chapter 7 bankruptcy, homelessness, or much worse.
In the 1920s, people were allowed to purchase stocks using borrowed money on margin. This later contributed greatly to the economic hardship and misery of unemployment and asset loss during the crash of the New York Stock Exchange during the Great Depression, which began on October 29, 1929.
The centennial anniversary of the Great Depression is only five years away, and I do not think that either the Democrats or Republicans have learned its tragic financial lessons. In October 1929, there were frequent and massive bank runs lasting until March 1933. Throughout the 1930s Americans lost their homes and land, bartering was common, school budgets were drastically cut, unemployment was 25% in 1933, and farmers were considered lucky to be able to grow food, raise livestock, and easily feed themselves.
Many people had the equivalent of one day’s worth of work per week, and hunger was commonwith much of the former middle class sinking into poverty, barely able to afford new shoes, clothing, tires, and groceries.
Despite President Franklin D. Roosevelt’s New Deal, the Great Depression in the U.S. did not truly end until the Japanese surprise attack on Pearl Harbor on December 7, 1941, which began the U.S. involvement in World II.
What worries me is that Trump‘s“One Big Beautiful Bill Act,” which the House of Representatives passed on May 21, is too big and not beautiful because it will increase our deficit by $2 trillion to $4 trillion over the next ten years. Senator Rand Paul (R-KY) claimed on June 1 that the bill would increase the deficit by $5 trillion while the Congressional Budget Office estimated on June 5 that the bill would increase the deficit by $3 trillion.
In the X (formerly Twitter) posts heard around the world, Elon Musk called the One Big Beautiful Bill on June 3, a “disgusting abomination.” He bluntly called it “‘massive, outrageous [and] pork-filled” noting that it would “‘massively increase the already gigantic budget deficit,’” and that “‘Congress is making America bankrupt.’” Lastly, Musk angrily threatened, “‘in November next year, we [will] fire all politicians who betrayed the American people.’”
I think that it can be accurately said that Musk is no longer Trump’s “First Buddy” despite the SpaceX and Tesla CEO having received a “golden key emblazoned with the White House insignia” from the president on May 30. The body language of Trump sitting in his black Oval Office chair while presenting the award and shaking Musk’s hand speaks volumes about political power.
I am not optimistic about the financial future of the U.S. I seriously doubt that Trump and the Republican Congress are ever going to balance the budget, and unfortunately, the national debt at its present rate will be $43 trillion to $45 trillion when the president leaves office on January 20, 2029.
Time will truly tell if Trump is just an affable and loquacious blowhard in regard to reducing the national debt and balancing the budget, which he miserably failed to do from 2017 to 2021.
This entire spring Trump vehemently pressured Congressional Republicans to pass his landmark legislation, especially delaying his Medicaid “reforms” or cuts for able-bodied people until 2029 so that the Democrats could not use it mendaciously against him, especially in the legacy media during the midterm 2026 Congressional elections. However, I hope that the Senate will make the necessary changes before July 4 to reduce the national debt.
In fact, Trump‘s “eloquent” and succinct words to House Republicans on May 20 were “Don’t f–k around with Medicaid.“
What the U.S. needs is a balanced budget with a thorough audit of the Pentagon, Medicare, and getting able-bodied people off Medicaid unless they can work a minimum of twenty hours per week or the equivalent, such as volunteering or doing elder care in order to reduce our national debt, which is now quickly approaching $37 trillion within five short days.
If a person’s or family’s stock prices dramatically decrease, the interest rate incurred on any cash advances or loans from a credit card when “gambling” on the New York Stock Exchange could be financially devastating to the average household. Borrowing money on a home equity loan could also quickly wipe out a person’s equity to $0 or close to it. Catastrophic losses on any stocks declining in value could possibly cause greater U.S. consumer debt and high unpayable credit card interest rates with a loss of a person’s net worth, decreased credit score, and home foreclosure.
Today, U.S. consumer debt is an astounding $18.04 trillion, while our credit card debt is $1.3 trillion. That is a lot of money owed to the banks.
One person who has been injecting some sanity into this entire potential financial mess is Florida Governor Ron DeSantis. He is advocating a balanced budget with the hope that the Senate will make the necessary modifications to remove the amount of deficit spending in the One Big Beautiful Bill Act.
Fortunately, DoGE (Department of Government Efficiency), which still exists despite the departure of Elon Musk on May 30, is still trying to reduce fraud, waste, and abuse along with reducing our national debt, but their savings so far are a drop in the bucket. However, interest on the national debt is increasing by $1 trillion approximately every one hundred days based on optimistic calculations from March 4, 2024.
One of DeSantis’ biggest criticisms of the One Big Beautiful Bill Act, among many others is that “‘The senate [sic] rules prevent it [the DoGE cuts] from cutting ‘discretionary’ spending — eg [sic] the Department of Education or federal grants. The DoGE cuts are overwhelmingly discretionary, not mandatory.”
His second major criticism among a myriad of other politicians and economists is a call for a balanced budget or close to it in order to avoid future bankruptcy, which would certainly cause the U.S. dollar to cease being the world’s reserve currency while significantly lowering our standard of living and causing massive unemployment.
The projected national debt in 2029, as previously mentioned, could be as high as $46.7 trillion at our current rate of spending, which is clearly unsustainable. This would cause nothing but economic misery and a contraction of the middle class for the next two generations of Americans for the remainder of the 21st century. During the early 2030s, the U.S. Titanic will most likely hit a huge iceberg, but it will be a matter of how hard, and whether there are enough “lifeboats.”
I sincerely hope that President Trump’s tariffs will bring more manufacturing back to the U.S., and expand the economy in order to pay down our national debt, but I am somewhat skeptical.
The U.S. must not forget that it has been responsible for two worldwide economic calamities in the last century: the Great Depression of 1929 and the Great Recession of 2008. We do not need to cause a third one or much of the world will truly begin to hate us.
In the meantime, Congressman Ben Cline (R-VA) needs to introduce a bill in the House of Representatives making it illegal to use credit card cash advances and loans along with home equity lines of credit to purchase stocks in order to protect all U.S. consumers and families. One pressing reason why is that our national debt is going to reach a huge $39.23 trillion or more in early to mid-2027 possibly causing the New York Stock Exchange to decrease considerably in value, and crash in 2029 when our national “credit card” possibly expands to over $46.7 trillion.
Robert L. Maronic