Consumer Credit Growing at its Fastest Pace Since the Great Recession

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Deleveraging  seems to be a thing of the past….

A chart to put things into perspective…

2 Responses to “Consumer Credit Growing at its Fastest Pace Since the Great Recession”

  1. I don’t agree with the writer’s position that growth in credit for student loans finances consumption in the same way that growth in other non-revolving credit does.

    That’s an important point of difference, because growth in student loans accounts for pretty much all growth in non-revolving credit.

    See these links, for example:
    http://econintersect.com/wordpress/?p=19713
    http://econompicdata.blogspot.com/2011/12/consumer-credit-excluding-student-loans.html

    The writer’s position implies that students are choosing to finance a growing portion of their school expenses so that they have an increasing amount of cash to spend on current consumption. My belief is that a large portion of the growth in student debt reflect very rapid growth in tuition at state schools as states make large cuts in funding for higher education.

    I haven’t looked for or seen data confirming my belief, but I have seen plenty of data on cuts in higher education and the resulting increases in tuition at public colleges and universities.

  2. Repost of a comment supposedly stuck in moderation limbo.

    ottnott says:
    Your comment is awaiting moderation.
    March 22, 2012 at 4:51 pm

    I don’t agree with the writer’s position that growth in credit for student loans finances consumption in the same way that growth in other non-revolving credit does.

    That’s an important point of difference, because growth in student loans accounts for pretty much all growth in non-revolving credit.

    See these links, for example:
    http://econintersect.com/wordpress/?p=19713
    http://econompicdata.blogspot.com/2011/12/consumer-credit-excluding-student-loans.html

    The writer’s position implies that students are choosing to finance a growing portion of their school expenses so that they have an increasing amount of cash to spend on current consumption. My belief is that a large portion of the growth in student debt reflect very rapid growth in tuition at state schools as states make large cuts in funding for higher education.

    I haven’t looked for or seen data confirming my belief, but I have seen plenty of data on cuts in higher education and the resulting increases in tuition at public colleges and universities.

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