by Alex Deluce, Gold Telegraph:

Shop till you drop is not just a silly phrase. For the majority of Americans, it has become an uneasy reality.

Consumer debt is at a record high. In the first quarter of 2018, Americans owed $3.824 trillion, up 5.1 percent from the same time period last year. This includes all debts except mortgages. As our economy grows, so does our spiraling tower of debt. Debt is a worry for the future, but Americans are happily living in the present. For now.

Over the past decade, consumer debt has surged almost 50 percent.

Automobile loans have increased to $1.1 trillion, an increase of almost 4 percent from last year. Credit card debt rose to $977 billion, an annual increase of 5 percent. This is actually down 5.6 percent from the pre-Trump 2016 era.

Student loans have seen a rapid increase, to a record high of $1.51 trillion. The annual increase of 5.1 percent is high, but it shows a decrease from previous years. From 2007 to 2012, student loans rose from 11 percent to 15 percent annually. While actual student enrollment has decreased, student loan balances have skyrocketed 146 percent during the past decade, from $619 million to $1.521 trillion. Once they graduate, today’s students will remain shackled to student loan debts for decades. College debt has become its own industry, with private college investments, corporations tending to students’ every need, new college-related construction projects, with administrators racking in exorbitant salaries. The question is, who will pay for all these amenities?

Wealthy and middle-class parents will go to great lengths to get their kids into the best colleges to ensure their future. This allows these institutions to keep raising the price of tuition. For many college graduates, the future is looking increasingly bleak as they are facing repayment of debts instead of buying a house or a vehicle, which was the typical post-graduation step of their parents’ generation.

With banks happily lending students for them to get a degree, many college graduates are facing indentured servitude instead of a better style of living. Upward mobility, the dream that created and sustained Americans for generations, may turn into the American nightmare. College loan debt is a timebomb waiting to explode.

The economy is showing signs of growth, unemployment is at an all-time low, and consumer confidence is high enough for record spending and accumulation of debt. Many low and middle-class families are living with high debts and very little savings. The poorer the household, the more severe the financial situation.

High prices are making it increasingly difficult to meet necessary household expenses and is forcing many to increase their borrowing just to stay afloat. The answer is to decrease both spending and the accrual of debt.

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