Sunday, June 8, 2014

Borrowing for Consumer Spending is a Good Thing?

As reported in yesterday's Wall Street Journal, "Consumers revved up their borrowing in April, with growth in credit card debt accelerating at the fastest pace in more than a dozen years....The sizable climb is an encouraging sign for the economy, suggesting that consumers are confident enough to boost purchases by borrowing." If this is supposed to be good news then why does my stomach hurt? Sure, consumer spending can be great for our economy. Our purchases help employ a whole lot of people. It's not the concept of spending that's making me feel ill, it's the suggestion that consumers "borrowing" money to fund their purchases is seen as a positive sign. It's not. Racking up more credit card debt to fuel consumer spending is a terrible idea. Einstein's definition of insanity is doing the same thing and expecting a different result. We shouldn't have an economy built on the backs of people who can't afford it.

What do you think?


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