Americans Borrow Record Amount of Money

Wasn't it just a handful of years ago that Americans got punched in the gut when they borrowed too much for houses, trucks and vacations?  Wasn't it just a few years ago when we heard so many Americans lament that they had "learned their lesson" on borrowing for things they can't afford?

Apparently, Americans have a really short memory....

US Consumer Borrowing Hits Another Record in June

U.S. consumer borrowing hit another record in June, good news for the American economy.

Americans piled on another $20.7 billion in debt in June, bringing total consumer borrowing to a record $3.42 trillion, the Federal Reserve reported Friday.

In June, borrowing in the category that includes auto and student loans rose by $15.2 billion. Borrowing in the category that includes credit cards rose by $5.5 billion.

The Fed's monthly report on credit does not cover home mortgages or other loans secured by real estate such as home equity loans

Economists expect consumers to borrow and spend more the rest of the year. That would boost growth in a country where consumer spending accounts for nearly 70 percent of economic activity.

The American economy grew at annual rate of 0.6 percent from January to March and 2.3 percent from April through June. Economists expect growth to pick up to about a 3 percent pace the second half of the year.

Consumers are drawing confidence from an improving job market. On Friday, the Labor Department said employers added 215,000 jobs in July and unemployment remained at a seven-year low 5.3 percent.

Over the past year, consumer borrowing is up 6.5 percent. Borrowing rose 7.7 percent in the student and auto loan category and 3.5 percent in the credit card category.

During and after the 2007-2009 Great Recession, Americans scaled back their borrowing. Consumer borrowing hit bottom at less than $2.52 trillion in July 2010 and has been climbing more or less steadily ever since.

Here;  http://abcnews.go.com/Business/wireStory/us-consumer-borrowing-hits-record-june-32951421

Please notice that the article started off with the first sentence telling us that this is "good news" for the economy.  And here is why they say this....Bob borrows $30K to buy his dream Ford truck.  Ford gets the order and hires a new worker to keep up with demand.  That new worker goes to Applebee's to celebrate and buys a steak dinner.  Applebee's hires another host to keep up with business and they put in another massive order for steaks.  Beef prices go up so the rancher sells his steers at a bigger profit and decides to go buy a new Ford truck with his windfall.

Now, take that story and multiply by 10 million and you start to get the idea of WHY borrowing money is "good" for the economy.  It gives us lots of economic stimulation TODAY...and Lord knows that's what Americans ALWAYS WANT....stimulation TODAY!

So what's the problem with borrowing?

It's indicative of an unhealthy society who constantly wants STUFF that they can't afford.

Connected with this is a society filled with people who will be UNHAPPY if they can't have their stuff RIGHT NOW!  And what happens when we can't have the latest iPhone, the best new shiny car, the biggest house in the best neighborhood and post lots of pictures to Facebook from our latest vacation to Greece....all of it borrowed.

Answer:  we get depressed and feel like losers.  We then go to the Doctor who gives us some drugs so we can feel better about ourselves and continue borrowing as we chase the American dream.

The Bible warns that the borrower will end up being slave to the lender.  God doesn't want us to be slaves to anyone or anything!  He wants us to trust Him to provide everything we will NEED for our short journey here on earth.  Borrowing for a whole pile of shiny stuff, most of which we don't NEED, sets us up for disaster, worry, anxiety, family strife and heartache.

Clearly this article points out one more reason that America must be very close to a disastrous fall.

Many pundits believe the next collapse we have here will make the Great Recession of 2007-2008 look like it was just the warm up band for the main event.

I agree.  The next collapse will focus around the U.S. bond market bubble....and when that pops it may unleash a tsunami of global, financial unraveling.

Please remember, all these things MUST HAPPEN....but fear not because you have Jesus as your savior.