Lines of credit and the economy

[Rubia Warren]

When the the state of the economy is described, isn't it a bit off? At least in terms of what consumers spend?
The reason I ask this, is because I have been thinking about it lately- tell me if I am right or wrong, cuz I really don't know.
Credit now, compared to even when I was a kid in the early 80's (even a teen in the early 90's), is very easy to obtain. Americans are bombarded with ads for car loans, consolidation loans, credit cards, etc. daily. Credit when I was young was very difficult to get- you had to really be a responsible person. Today, you just have to be breathing and someone will loan you something. Granted, if you have crappy credit history, you'll pay a higher interest rate, etc. but you still will get credit.
I have read stats which say that the average Amercian family has about 10,000 dollars just on credit card debt alone. That may or may not be exactly the case, but just for the sake of this thread, I think it's safe to say that American families generally have some credit card debt.
Now, since people-even those who prolly shouldn't- have access to credit, and are making purchases with money they don't have yet, doesn't that make a good portion of what is looked at in consumer spending an illusion?
Why is it considered a good thing that we spend so much if a good part of that spending is borrowing money in order to spend it? What are the good and bad sides to that?

[Ryokan]

When the the state of the economy is described, isn't it a bit off? At least in terms of what consumers spend?
The reason I ask this, is because I have been thinking about it lately- tell me if I am right or wrong, cuz I really don't know.
Credit now, compared to even when I was a kid in the early 80's (even a teen in the early 90's), is very easy to obtain. Americans are bombarded with ads for car loans, consolidation loans, credit cards, etc. daily. Credit when I was young was very difficult to get- you had to really be a responsible person. Today, you just have to be breathing and someone will loan you something. Granted, if you have crappy credit history, you'll pay a higher interest rate, etc. but you still will get credit.
I have read stats which say that the average Amercian family has about 10,000 dollars just on credit card debt alone. That may or may not be exactly the case, but just for the sake of this thread, I think it's safe to say that American families generally have some credit card debt.
Now, since people-even those who prolly shouldn't- have access to credit, and are making purchases with money they don't have yet, doesn't that make a good portion of what is looked at in consumer spending an illusion?
Why is it considered a good thing that we spend so much if a good part of that spending is borrowing money in order to spend it? What are the good and bad sides to that?
The reason that is happening is that credit is so cheap, because Alan Greenspan took interest rates down so so so low. In the long run, probably nothing happens. A recession, which would have happened sooner or later anyway, people pay back what they owe instead of buying stuff, a few politicians get canned, I don't get my 50 inch plasma screen TV as soon as I wanted to, have to drive my car longer. Stuff like that. It won't be the end of the US, or permanently cripple the economy, or anything like that.

[Rubia Warren]

Isn't credit making it appear though, as if we are spending more than what we are? I dunno how to word the questions I want to ask, so you have to forgive me. If so many things are in large part due to people, companies, and governments getting with credit, then doesn't that make when we see charts, graphs, numbers and statistics to be a little off? Even if they are postive ones or negative ones.
So when people look at consumer spending, for example, isn't the fact that much of that spending was with a credit card or on some line of credit more of an illusion that a good sign that consumer spending is up, since a good part of it was "money" spent that the consumers didn't have?

[Ryokan]

Isn't credit making it appear though, as if we are spending more than what we are? I dunno how to word the questions I want to ask, so you have to forgive me. If so many things are in large part due to people, companies, and governments getting with credit, then doesn't that make when we see charts, graphs, numbers and statistics to be a little off? Even if they are postive ones or negative ones.
So when people look at consumer spending, for example, isn't the fact that much of that spending was with a credit card or on some line of credit more of an illusion that a good sign that consumer spending is up, since a good part of it was "money" spent that the consumers didn't have?
But it was money consumer expected to have in the future. I understand what you are asking, but most (most, not all) people don't take on debt they can't pay back, and it is factored into economic growth in the long run. One of the things recessions are and do is unload debt. People make payments but don't buy new stuff. Despite what some may tell you, the system works, and we aren't on the brink of a debt induced crash.