More Debt-As-Good-News Propaganda

Bloomberg reports:

Consumer borrowing rose in October by the most in five months as credit-card use picked up and Americans took out more loans for car purchases and education.

The $18.2 billion increase in credit followed a revised $16.3 billion gain in September that was more than initially reported, the Federal Reserve said today in Washington. The median forecast in a Bloomberg survey of economists called for a $14.5 billion advance.

Credit-card borrowing rose by the most since May as job gains, income growth and rising household wealth gave Americans the confidence to borrow. Consumers also took out more non-revolving loans for big-ticket purchases such as cars, which are on pace for their best sales year since 2007.

“Non-revolving credit has been the driving force behind consumer credit growth basically since the recession,” said Dana Saporta, director of U.S. economics research at Credit Suisse in New York. “As incomes start to pick up and those that have jobs have more confidence that they’ll see some income growth, we could see this revolving component post more consistent gains.”


Faster job growth may make Americans feel confident about taking on more debt. Employers added 203,000 workers in November after 200,000 a month earlier, a report today from the Labor Department showed. The unemployment rate dropped to a five-year low of 7 percent.

Wouldn’t it be wonderful to live in a society where a feeling of prosperity and optimism meant that people immediately began saving and investing more of their income? Instead, we have all been trained to go into debt during hard times and go into more debt during good times—or just times that we are hopeful will become good. This is all to the (short-term!) benefiting of politicians; because debt slaves don’t make for effective freedom fighters.

The low unemployment rate is based on smoke and mirrors. Nevertheless, for whatever reason, “consumer confidence” is surging right now. Tyler Durden gives some perspective on this at Zero Hedge: “This is the biggest absolute improvement in current conditions since December 2008…. and that ended well eh?”

It is almost like we have been trained to poison ourselves the moment we feel healthy. The exuberance of hopefulness induces us to undermine our prospect by taking on more debt.

We would be better off with less “confidence.”