U.S. consumer borrowing rises to record $2.75 trillion
The Consumerist/Flickr
WASHINGTON Americans swiped their credit cards more often in October and borrowed more to attend school and buy cars. The increases drove U.S. consumer debt to an all-time high.
The Federal Reserve says consumers increased their borrowing by $14.2 billion in October from September. Total borrowing rose to a record $2.75 trillion.
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Borrowing in the category that covers autos and student loans increased by $10.8 billion. Borrowing on credit cards rose by $3.4 billion, only the second monthly increase in the past five months.
The strong rise in borrowing came in a month when American cut back on consumer spending, reflecting in part disruptions from Superstorm Sandy.
Many consumers may also have scaled back because of fears about the "fiscal cliff." That's the name for automatic tax increases and spending cuts that will take effect in January if Congress and the Obama administration fail to strike a budget deal by then.
Consumer spending drives roughly 70 percent of economic activity.
Economists think that it could bounce back in November. But the underlying trend remains weak because with unemployment remaining high, households don't have the incomes to spend.
Many consumers have been reluctant to build up credit card debt, which typically carries steeper interest rates than other loans.
Credit card usage has fallen sharply since the 2008 credit crisis. Four years ago, Americans had $1.03 trillion in credit card debt, an all-time high. In October, that figure was 17 percent lower.
During the same period, student loan debt has increased dramatically. The category that includes auto and student loans is 22 percent higher than in July 2008. That reflects in part the fact that many Americans who have lost jobs decided to go back to school to get training for new careers.
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The GOP has got their own voting base completely fool by telling them that the president borrows and spends. Article 1 Section 8 of the U.S. Constitution says this, Only congress has the power to tax and spend so if the republicans tells you that the president spends your money then they have lied to you.
They know most of their voters don't have enough brains to do any research to find out the truth for for themselves so they just tell them anything and they will believe it.
The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;
An Individual or the Government as an unrestrained Mob, cannot loan themselves money. So, to whom is the United States indebted and what for? Money in itself is not tangible and consequentially cannot yield on it's own; hence a major corruption of the system .
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Americans will spend money whether they have any or not.