WEB Notes: Anyone who has studied with us and read our website for any length of time knows we all need to stay out of debt. That is Biblical and just common sense. When you go into debt you pay more for the item than you need too. That makes no sense whatsoever. Take a look at the amount of consumer debt as outlined in the graph.
Total consumer credit – or less soothingly, consumer debt – rose 4.8% in the second quarter from a year earlier, or by $176 billion, to $3.87 trillion (not seasonally adjusted), the highest ever, according to the Federal Reserve. This includes credit-card debt, auto loans, and student loans, but not mortgage-related debt. Given how passionate Americans normally are in spending money they don’t have – that 4.8% increase is moderate: In 2011, increases exceeded 11%.
The chart below shows the progression of consumer debt since 2006. After the seasonal hangover in Q1, following the spend-and-borrow party in Q4, consumer debt set a new record in Q2: