Americans are on an absolutely spectacular debt binge. Does this mean that the economy is getting better, or does this mean that U.S. consumers are totally tapped out and are relying on borrowed money to make it from month to month? On Monday, the Federal Reserve announced that total consumer credit in the United States increased by a whopping 24.6 billion dollars in May, which was far greater than the 12.4 billion dollar gain that economists were anticipating. Total U.S. consumer credit has now hit a grand total of 3.9 trillion dollars, but it is the “revolving credit” numbers that are getting the most attention. Revolving credit alone shot up by 9.8 billion dollars in May, and that was one of the largest monthly increases ever recorded. At this point, total “revolving credit” has reached a brand new all-time record high of 1.39 trillion dollars, and credit card debt accounts for nearly all of that figure.
The optimists will tell us that this is yet another sign that the U.S. economy is booming, and hopefully they are correct.
But does it really make sense for U.S. consumers to go on a historic debt binge when much of the country is already drowning in debt and just barely scraping by from month to month?
That certainly isn’t sustainable.
I also pointed out that 22 percent of all Americans cannot pay all of their bills in a typical month. . .