Consumer Credit: Healing but Still in Bad Shape

Consumer credit per capita is no longer declining according to the NY Fed in 1Q2011. But consumer credit has a long way to go to get healthy. The most rapidly growing area of credit is for student loans, an area that has come under increasing scrutiny for abuse plus lack of efficiency and effectiveness.

Consumer Credit Increases For First Time Since February 2009

Econintersect has a lot of “buts” but agrees with the Federal Reserve that consumer credit expanded in March 2011. The first “but” is the amount of increase. The second “but” is that without student loans consumer credit would have been down again.

Snake Oil, Paul Krugman, Student Loans & Consumer Credit

Is the government trapping youth with loans? Is the government becoming a snake oil salesman? Professor Krugman implies they are. Consumer credit is up only because of student loans. Otherwise consumer credit would be down since the end of 2009 by more than $150 billion.