Saturday, August 11, 2012

Wall Street Journal kind of sort of thinks it's ok that consumer debt has risen for the past 10 months.

I don't like the Wall Street Article, "Rising Student Debt Weakens Credit Story".

I don't like the article because the headline seems to perpetuate existing falsehoods about rising consumer debt. The article states...
If the consensus expectation for a 10.5 billion dollar expansion is correct, total consumer credit would finally return to a 2008 high of about 2.58 trillion.
This would be another reason for cheer following Friday's stronger-than-expected jobs report. A 10th consecutive monthly increase in such credit, which excludes mortgage debt, would show one of the economy's main engines is continuing to tick over despite concerns consumers have lost confidence recently. 
What I find terrifying about the above statement is that the article is stating that we are approaching debt levels that matched debt levels during the height of the economic crash of 2007 / 2008, as if it was a good thing.

Perhaps consumers have "lost confidence" because their neighbors are losing their homes, and perhaps that is because up to a billion dollars a day is being paid in interest charges only on U.S. consumer debt.

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