http://money.cnn.com/2014/02/18/news/household-debt/index.html?iid=SF_E_Lead
This article points out the fact that Americans are borrowing more than they have since before the recession. The question that naturally follows is "is that a good thing?" The article seems to imply that it is a sign of confidence in the economy which would be a good thing. Another thing to think of, however, is the fact that taking on more debt than can be handled responsibly is one thing that can cause recessions. So, while the optimism about the economy is certainly a good thing, it is important to also be wary of too much debt.
It is rather interesting that the writer implies that household borrowing is such a good thing without specifically saying why. Apparently borrowing is enough to soften the tremendous quarter of a trillion dollar increase in household debt in the U.S. Borrowing may in fact be the turn around to lowering debt, but numbers like this suggest that it clearly hasn't been enough thus far.
ReplyDeleteI don't necessarily think that our increase in spending in debt is a good thing because taking loans on houses that weren't affordable and high debt is largely what caused the financial crisis of 2008. However, if the loans are affordable and will be paid back in full this could help the economy and get more money pumping. People just need to be careful that they are spending what they can pay back.
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