We saved up a lot during the years of the pandemic, and now it appears we are spending it.

Americans have begun financing their new spending habits with credit cards and draining their savings in recent months, as the cost of living soars. Some experts fear that means a spending slowdown—or even a recession. Which if you have been paying attention to us, we'd tell you we are only not in one in name only, because it certainly feels like we're in a recession.

But there's the problem for the Fed - we're spending like there is not tomorrow. And all that spending has created confusion in their minds and that of economists about the "R" word.

U.S. consumers’ credit card balances jumped 7% in the fourth quarter of 2022 to a new record high of $986 billion, a New York Federal Reserve report showed this week. And most estimates show that last year alone consumers spent roughly 30% of the $2.7 trillion in excess savings they built up during the pandemic, with lower-income consumers tapping closer to 50%.

And while you while you’re getting in debt, how’s that rich, old uncle of yours doing?

In fiscal 2021, the average interest rate on federal debt was a record-low 1.605%. But with the Fed raising its policy rate to try to cool off the economy, the U.S. has started paying more to borrow: The average interest rate on federal debt last year ticked up to 2.07%.

And his numbers are in the Trillions of dollars owed.

Even your Uncle Sam is starting to feel some of this pain.

And here's the thing - your dear, old uncle don't like paying a lot on his debt, so he's going to have to do something about it sooner, rather than later.

But we keep spending.

And it's like we are playing a very expensive game of chicken between the average US Consumer and The Federal Reserve Bank. Nothing about this sounds pretty and will probably end badly for all of us.