题目内容
Rates Are Low, but Consumers Won’t Borrow With heavy debt loads and high joblessness, Americans are cautious. A) The US Federal Reserve (Fed)’s announcement last week that it intended to keep credit cheap for at least two more years was a clear invitation to Americans: Go out and borrow. B) But many economists say it will take more than low interest rates to persuade consumers to take on more debt. There are already signs that the recent stock market fluctuations, turbulence in Europe and the US deficit have scared consumers. On Friday, preliminary data showed that the Thomson Reuters/University of Michigan consumer sentiment index had fallen this month to lower than it was in November 2008, when the United States was deep in recession. Under normal circumstances, the Fed’s announcement might have attracted new home and car buyers and prompted credit card holders to rack up fresh charges. But with unemployment high and those with jobs worried about keeping them, consumers are more concerned about paying off the loans they already have than adding more debt. And by showing its hand for the next two years, the Fed may have thoughtlessly invited prospective borrowers to put off large purchases. C) Lenders, meanwhile, are still dealing with the effects of the boom-gone-bust and are forcing prospective borrowers to go to extraordinary lengths to prove their creditworthiness. D) "I don’t think lenders are going to be interested in extending a lot of debt in this environment," said Mark Zandi, chief economist of Moody’s Analytics, a macroeconomic consulting firm. "Nor do I think households are going to be interested in taking on a lot of debt." In housing, consumers have already shown a slow response to low rates. Applications for new mortgages have decreased this year to a 10-year low, according to the Mortgage Bankers Association. Sales of furniture and furnishings remain 22% below their pre-recession peak, according to SpendingPulse, a research report by Master Card Advisors. Credit card rates have actually gone up slightly in the past year. The one bright spot in lending is the number of auto loans, which is up from last year. But some economists say that confidence among car buyers is hitting new lows. E) For Xavier Walter, a former mortgage banker who with his wife, Danielle, accumulated $20,000 in credit card debt, low rates will not change his spending habits. As the housing market topped out five years ago, he lost his six-figure income. He and his wife were able to modify the mortgage on their four-bedroom house in Medford, New Jersey, as well as negotiate lower credit card payments. Two years ago, Mr. Walter, a 34-year-old father of three, started an energy business. He has sworn off credit. "I’m not going to go back in debt ever again," he said. "If I can’t pay for it in cash, I don’t want it." F) Until now, one of the biggest restraints on consumer spending has been a debt aftereffect. Since August 2008, when household debt peaked at $12.41 trillion, it has declined by about $1.2 trillion, according to an analysis by Moody’s Analytics of data from the Federal Reserve and Equifax, the credit agency. A large portion of that, though, was simply written off by lenders as borrowers defaulted on loans. By other measures, households have improved their position. The proportion of after-tax income that households spend to remain current on loan payments has fallen. G) Still, household debt remains high. That presents a paradox: many economists argue that the economy cannot achieve true health until debt levels decline. But credit, made attractive by low rates, is a time-tested way to increase consumer spending. With new risks of another downturn, economists worry that it will take years for debt to return to manageable levels. If the economy contracts again, said George Magnus, senior adviser at UBS, then "you could find a lot of households in a debt trap which they probably can never get out of" H) Mortgage lenders, meanwhile, burned by the housing crash, are extra careful about approving new loans. In June, for instance, Fannie Mac, the largest mortgage buyer in the United States, said that borrowers whose existing debt exceeded 45 to 50% of their income would be required to have stronger "compensating" factors, which might include higher savings. Even those borrowers in strong financial positions are asked to provide unusual amounts of paperwork. Bobby and Katie Smith have an extremely good credit record, tiny student debt and a combined six-figure income. For part of their down payment, they planned to use about $5,000 they had received as wedding gifts in February. But the lender would not accept that money unless the Smiths provided a certified letter from each of 14 guests, stating that the money was a gift, rather than a loan. "We laughed for a good 15 or 20 minutes," recalled Mr. Smith, 34. Mr. Smith, a program director for a radio station in Orlando, Florida, said they ended up using other savings for their down payment to buy a $300,000 four-bedroom house in April. I) For those not as creditworthy as the Smiths, low rates are irrelevant because they no longer qualify for mortgages. That leaves the eligible pool of loan applicants wealthier, "older and whiter," said Guy Cecala, publisher of Inside Mortgage Finance. "It’s creating much more of a divide," he said, "between the haves and the have-nots." "Car shoppers with the highest credit ratings can also get loans more easily, and at lower rates," said Paul C. Taylor, chief economist of the National Automobile Dealers Association. J) During the recession, inability to obtain credit severely cut auto buying as lenders rejected even those with good credit ratings. Now automakers are increasing their subprime (次级债的) lending again as well, but remain hesitant to approve large numbers of risky customers. K) The number of new auto loans was up by 16% in the second quarter compared with the previous year, said Melinda Zabritski, director of automotive credit at Experian, the information services company. But some economists warn that consumer confidence is falling. According to CNW Marketing Research, confidence among those who intend to buy a car this year is at its lowest since it began collecting data on this measure in 2000. L) On credit cards, rates have actually inched higher this year, largely because of new rules that curb the issuer’s ability to charge fees or raise certain interest rates at will. M) At the end of the second quarter, rates averaged 14.01% on new card offers, up from 13.75% a year earlier, according to Mail Monitor, which tracks credit cards for Synovate, a market research firm. According to data from the Federal Reserve, total outstanding debt on revolving credit cards was down by 4.6% during the first half of tile year compared with the same period a year earlier. N) Even if the Fed’s announcement helps keep rates steady, or pushes them down, businesses do not expect customers to suddenly charge up a storm. O) "It’s not like, ’Oh, credit is so cheap, let’s go back to the heydays (鼎盛时期),’" said Elizabeth Crowell, who owns Sterling Place, two high-end home furnishing and gift stores in New York. "People still fear for their jobs. So I think where maybe after other recessions they might return to previous spending habits, the pendulum hasn’t swung back the same way." The economists’ concern regarding the current economy is the unmanageable debt levels.
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Google’s Plan for World’s Biggest Online Library: Philanthropy or Act of Piracy A) In recent years, teams of workers dispatched by Google have been working hard to make digital copies of books. So far, Google has scanned more than 10 million titles from libraries in America and Europe—including half a million volumes held by the Bodleian in Oxford. The exact method it uses is unclear; the company does not allow outsiders to observe the process. Why is Google undertaking such a venture B) Why is it even interested in all those out-of-print library books, most of which have been gathering dust on forgotten shelves for decades The company claims its motives are essentially public-spirited. Its overall mission, after all, is to "organise the world’s information," so it would be odd if that information did not include books. The company likes to present itself as having lofty aspirations. "This really isn’t about making money. We are doing this for the good of society." As Santiago de la Morn, head of Google Books for Europe, puts it: "By making it possible to search the millions of books that exist today, we hope to expand the frontiers of human knowledge." C) Dan Clancy, the chief architect of Google Books, does seem genuine in his conviction that this is primarily a philanthropic (慈善的) exercise. "Google’s core business is search and find, so obviously what helps improve Google’s search engine is good for Google," he says. "But we have never built a spreadsheet (电子数据表) outlining the financial benefits of this, and I have never had to justify the amount I am spending to the company’s founders." D) It is easy, talking to Clancy and his colleagues, to be swept along by their missionary passion. But Google’s book-scanning project is proving controversial. Several opponents have recently emerged, ranging from rival tech giants such as Microsoft and Amazon to small bodies representing authors and publishers across the world. In broad terms, these opponents have levelled two sets of criticisms at Google. E) First, they have questioned whether the primary responsibility for digitally archiving the world’s books should be allowed to fall to a commercial company, in a recent essay in the New York Review of Books, Robert Darnton, the head of Harvard University’s library, argued that because such books are a common resource—the possession of us all—only public, not-for-profit bodies should be given the power to control them. F) The second related criticism is that Google’s scanning of books is actually illegal. This allegation has led to Google becoming mired in (陷入) a legal battle whose scope and complexity makes the Jarndyce and Jarndyce case in Charles Dickens’ Bleak House look straightforward. At its centre, however, is one simple issue: that of copyright. The inconvenient fact about most books, to which Google has arguably paid insufficient attention, is that they are protected by copyright. Copyright laws differ from country to country, but in general protection extends for the duration of an author’s life and for a substantial period afterwards, thus allowing the author’s heirs to benefit. (In Britain and America, this post-death period is 70 years.) This means, of course, that almost all of the books published in the 20th century are still under copyright—and the last century saw more books published than in all previous centuries combined. Of the roughly 40 million books in US libraries, for example, an estimated 32 million are in copyright. Of these, some 27 million are out of print. G) Outside the US, Google has made sure only to scan books that are out of copyright and thus in the "public domain" (works such as the Bodleian’s first edition of Middlemarch, which anyone can read for free on Google Books Search). H) But, within the US, the company has scanned both in-copyright and out-of-copyright works. In its defence, Google points out that it displays only small segments of books that are in copyright—arguing that such displays are "fair use." But critics allege that by making electronic copies of these books without first seeking the permission of copyright holders, Google has committed piracy. "The key principle of copyright law has always been that works can be copied only once authors have expressly given their permission," says Piers Blofeld, of the Sheil Land literary agency in London. "Google has reversed this—it has simply copied all these works without bothering to ask." I) In 2005, the Authors Guild of America, together with a group of US publishers, launched a class action suit (集团诉讼) against Google that, after more than two years of negotiation, ended with an announcement last October that Google and the claimants had reached an out-of-court settlement. The full details are complicated—the text alone runs to 385 pages—and trying to summarise it is no easy task. "Part of the problem is that it is basically incomprehensible," says Blofeld, one of the settlement’s most vocal British critics. J) Broadly, the deal provides a mechanism for Google to compensate authors and publishers whose rights it has breached (including giving them a share of any future revenue it generates from their works). In exchange for this, the rights holders agree not to sue Google in future. K) This settlement hands Google the power—but only with the agreement of individual rights holders—to exploit its database of out-of-print books. It can include them in subscription deals sold to libraries or sell them individually under a consumer licence. It is these commercial provisions that are proving the settlement’s most controversial aspect. L) Critics point out that, by giving Google the right to commercially exploit its database, the settlement paves the way for a subtle shift in the company’s role from provider of information to seller. "Google’s business model has always been to provide information for free, and sell advertising on the basis of the traffic this generates," points out James Grimmelmann, associate professor at New York Law School. Now, he says, because of the settlement’s provisions, Google could become a significant force in bookselling. M) Interest in this aspect of the settlement has focused on "orphan" works, where there is no known copyright holder—these make up an estimated 5%-10% of the books Google has scanned. Under the settlement, when no rights holders come forward and register their interest in a work, commercial control automatically reverts to Google. Google will be able to display up to 20% of orphan works for free, include them in its subscription deals to libraries and sell them to individual buyers under the consumer licence. N) It is by no means certain that the settlement will be enacted (执行)—it is the subject of a fairness hearing in the US courts. But if it is enacted, Google will in effect be off the hook as far as copyright violations in the US are concerned. Many people are seriously concerned by this—and the company is likely to face challenges in other courts around the world. O) No one knows the precise use Google will make of the intellectual property it has gained by scanning the world’s library books, and the truth, as Gleick, an American science writer and member of the Authors Guild, points out, is that the company probably doesn’t even know itself. But what is certain is that, in some way or other, Google’s entrance into digital bookselling will have a significant impact on the book world in years to come. Opponents of Google Books believe that digitally archiving the world’s books should be controlled by non-profit organizations.
Rates Are Low, but Consumers Won’t Borrow With heavy debt loads and high joblessness, Americans are cautious. A) The US Federal Reserve (Fed)’s announcement last week that it intended to keep credit cheap for at least two more years was a clear invitation to Americans: Go out and borrow. B) But many economists say it will take more than low interest rates to persuade consumers to take on more debt. There are already signs that the recent stock market fluctuations, turbulence in Europe and the US deficit have scared consumers. On Friday, preliminary data showed that the Thomson Reuters/University of Michigan consumer sentiment index had fallen this month to lower than it was in November 2008, when the United States was deep in recession. Under normal circumstances, the Fed’s announcement might have attracted new home and car buyers and prompted credit card holders to rack up fresh charges. But with unemployment high and those with jobs worried about keeping them, consumers are more concerned about paying off the loans they already have than adding more debt. And by showing its hand for the next two years, the Fed may have thoughtlessly invited prospective borrowers to put off large purchases. C) Lenders, meanwhile, are still dealing with the effects of the boom-gone-bust and are forcing prospective borrowers to go to extraordinary lengths to prove their creditworthiness. D) "I don’t think lenders are going to be interested in extending a lot of debt in this environment," said Mark Zandi, chief economist of Moody’s Analytics, a macroeconomic consulting firm. "Nor do I think households are going to be interested in taking on a lot of debt." In housing, consumers have already shown a slow response to low rates. Applications for new mortgages have decreased this year to a 10-year low, according to the Mortgage Bankers Association. Sales of furniture and furnishings remain 22% below their pre-recession peak, according to SpendingPulse, a research report by Master Card Advisors. Credit card rates have actually gone up slightly in the past year. The one bright spot in lending is the number of auto loans, which is up from last year. But some economists say that confidence among car buyers is hitting new lows. E) For Xavier Walter, a former mortgage banker who with his wife, Danielle, accumulated $20,000 in credit card debt, low rates will not change his spending habits. As the housing market topped out five years ago, he lost his six-figure income. He and his wife were able to modify the mortgage on their four-bedroom house in Medford, New Jersey, as well as negotiate lower credit card payments. Two years ago, Mr. Walter, a 34-year-old father of three, started an energy business. He has sworn off credit. "I’m not going to go back in debt ever again," he said. "If I can’t pay for it in cash, I don’t want it." F) Until now, one of the biggest restraints on consumer spending has been a debt aftereffect. Since August 2008, when household debt peaked at $12.41 trillion, it has declined by about $1.2 trillion, according to an analysis by Moody’s Analytics of data from the Federal Reserve and Equifax, the credit agency. A large portion of that, though, was simply written off by lenders as borrowers defaulted on loans. By other measures, households have improved their position. The proportion of after-tax income that households spend to remain current on loan payments has fallen. G) Still, household debt remains high. That presents a paradox: many economists argue that the economy cannot achieve true health until debt levels decline. But credit, made attractive by low rates, is a time-tested way to increase consumer spending. With new risks of another downturn, economists worry that it will take years for debt to return to manageable levels. If the economy contracts again, said George Magnus, senior adviser at UBS, then "you could find a lot of households in a debt trap which they probably can never get out of" H) Mortgage lenders, meanwhile, burned by the housing crash, are extra careful about approving new loans. In June, for instance, Fannie Mac, the largest mortgage buyer in the United States, said that borrowers whose existing debt exceeded 45 to 50% of their income would be required to have stronger "compensating" factors, which might include higher savings. Even those borrowers in strong financial positions are asked to provide unusual amounts of paperwork. Bobby and Katie Smith have an extremely good credit record, tiny student debt and a combined six-figure income. For part of their down payment, they planned to use about $5,000 they had received as wedding gifts in February. But the lender would not accept that money unless the Smiths provided a certified letter from each of 14 guests, stating that the money was a gift, rather than a loan. "We laughed for a good 15 or 20 minutes," recalled Mr. Smith, 34. Mr. Smith, a program director for a radio station in Orlando, Florida, said they ended up using other savings for their down payment to buy a $300,000 four-bedroom house in April. I) For those not as creditworthy as the Smiths, low rates are irrelevant because they no longer qualify for mortgages. That leaves the eligible pool of loan applicants wealthier, "older and whiter," said Guy Cecala, publisher of Inside Mortgage Finance. "It’s creating much more of a divide," he said, "between the haves and the have-nots." "Car shoppers with the highest credit ratings can also get loans more easily, and at lower rates," said Paul C. Taylor, chief economist of the National Automobile Dealers Association. J) During the recession, inability to obtain credit severely cut auto buying as lenders rejected even those with good credit ratings. Now automakers are increasing their subprime (次级债的) lending again as well, but remain hesitant to approve large numbers of risky customers. K) The number of new auto loans was up by 16% in the second quarter compared with the previous year, said Melinda Zabritski, director of automotive credit at Experian, the information services company. But some economists warn that consumer confidence is falling. According to CNW Marketing Research, confidence among those who intend to buy a car this year is at its lowest since it began collecting data on this measure in 2000. L) On credit cards, rates have actually inched higher this year, largely because of new rules that curb the issuer’s ability to charge fees or raise certain interest rates at will. M) At the end of the second quarter, rates averaged 14.01% on new card offers, up from 13.75% a year earlier, according to Mail Monitor, which tracks credit cards for Synovate, a market research firm. According to data from the Federal Reserve, total outstanding debt on revolving credit cards was down by 4.6% during the first half of tile year compared with the same period a year earlier. N) Even if the Fed’s announcement helps keep rates steady, or pushes them down, businesses do not expect customers to suddenly charge up a storm. O) "It’s not like, ’Oh, credit is so cheap, let’s go back to the heydays (鼎盛时期),’" said Elizabeth Crowell, who owns Sterling Place, two high-end home furnishing and gift stores in New York. "People still fear for their jobs. So I think where maybe after other recessions they might return to previous spending habits, the pendulum hasn’t swung back the same way." During the recession, the number of car buyers decreased because it was difficult to obtain credit.
Rates Are Low, but Consumers Won’t Borrow With heavy debt loads and high joblessness, Americans are cautious. A) The US Federal Reserve (Fed)’s announcement last week that it intended to keep credit cheap for at least two more years was a clear invitation to Americans: Go out and borrow. B) But many economists say it will take more than low interest rates to persuade consumers to take on more debt. There are already signs that the recent stock market fluctuations, turbulence in Europe and the US deficit have scared consumers. On Friday, preliminary data showed that the Thomson Reuters/University of Michigan consumer sentiment index had fallen this month to lower than it was in November 2008, when the United States was deep in recession. Under normal circumstances, the Fed’s announcement might have attracted new home and car buyers and prompted credit card holders to rack up fresh charges. But with unemployment high and those with jobs worried about keeping them, consumers are more concerned about paying off the loans they already have than adding more debt. And by showing its hand for the next two years, the Fed may have thoughtlessly invited prospective borrowers to put off large purchases. C) Lenders, meanwhile, are still dealing with the effects of the boom-gone-bust and are forcing prospective borrowers to go to extraordinary lengths to prove their creditworthiness. D) "I don’t think lenders are going to be interested in extending a lot of debt in this environment," said Mark Zandi, chief economist of Moody’s Analytics, a macroeconomic consulting firm. "Nor do I think households are going to be interested in taking on a lot of debt." In housing, consumers have already shown a slow response to low rates. Applications for new mortgages have decreased this year to a 10-year low, according to the Mortgage Bankers Association. Sales of furniture and furnishings remain 22% below their pre-recession peak, according to SpendingPulse, a research report by Master Card Advisors. Credit card rates have actually gone up slightly in the past year. The one bright spot in lending is the number of auto loans, which is up from last year. But some economists say that confidence among car buyers is hitting new lows. E) For Xavier Walter, a former mortgage banker who with his wife, Danielle, accumulated $20,000 in credit card debt, low rates will not change his spending habits. As the housing market topped out five years ago, he lost his six-figure income. He and his wife were able to modify the mortgage on their four-bedroom house in Medford, New Jersey, as well as negotiate lower credit card payments. Two years ago, Mr. Walter, a 34-year-old father of three, started an energy business. He has sworn off credit. "I’m not going to go back in debt ever again," he said. "If I can’t pay for it in cash, I don’t want it." F) Until now, one of the biggest restraints on consumer spending has been a debt aftereffect. Since August 2008, when household debt peaked at $12.41 trillion, it has declined by about $1.2 trillion, according to an analysis by Moody’s Analytics of data from the Federal Reserve and Equifax, the credit agency. A large portion of that, though, was simply written off by lenders as borrowers defaulted on loans. By other measures, households have improved their position. The proportion of after-tax income that households spend to remain current on loan payments has fallen. G) Still, household debt remains high. That presents a paradox: many economists argue that the economy cannot achieve true health until debt levels decline. But credit, made attractive by low rates, is a time-tested way to increase consumer spending. With new risks of another downturn, economists worry that it will take years for debt to return to manageable levels. If the economy contracts again, said George Magnus, senior adviser at UBS, then "you could find a lot of households in a debt trap which they probably can never get out of" H) Mortgage lenders, meanwhile, burned by the housing crash, are extra careful about approving new loans. In June, for instance, Fannie Mac, the largest mortgage buyer in the United States, said that borrowers whose existing debt exceeded 45 to 50% of their income would be required to have stronger "compensating" factors, which might include higher savings. Even those borrowers in strong financial positions are asked to provide unusual amounts of paperwork. Bobby and Katie Smith have an extremely good credit record, tiny student debt and a combined six-figure income. For part of their down payment, they planned to use about $5,000 they had received as wedding gifts in February. But the lender would not accept that money unless the Smiths provided a certified letter from each of 14 guests, stating that the money was a gift, rather than a loan. "We laughed for a good 15 or 20 minutes," recalled Mr. Smith, 34. Mr. Smith, a program director for a radio station in Orlando, Florida, said they ended up using other savings for their down payment to buy a $300,000 four-bedroom house in April. I) For those not as creditworthy as the Smiths, low rates are irrelevant because they no longer qualify for mortgages. That leaves the eligible pool of loan applicants wealthier, "older and whiter," said Guy Cecala, publisher of Inside Mortgage Finance. "It’s creating much more of a divide," he said, "between the haves and the have-nots." "Car shoppers with the highest credit ratings can also get loans more easily, and at lower rates," said Paul C. Taylor, chief economist of the National Automobile Dealers Association. J) During the recession, inability to obtain credit severely cut auto buying as lenders rejected even those with good credit ratings. Now automakers are increasing their subprime (次级债的) lending again as well, but remain hesitant to approve large numbers of risky customers. K) The number of new auto loans was up by 16% in the second quarter compared with the previous year, said Melinda Zabritski, director of automotive credit at Experian, the information services company. But some economists warn that consumer confidence is falling. According to CNW Marketing Research, confidence among those who intend to buy a car this year is at its lowest since it began collecting data on this measure in 2000. L) On credit cards, rates have actually inched higher this year, largely because of new rules that curb the issuer’s ability to charge fees or raise certain interest rates at will. M) At the end of the second quarter, rates averaged 14.01% on new card offers, up from 13.75% a year earlier, according to Mail Monitor, which tracks credit cards for Synovate, a market research firm. According to data from the Federal Reserve, total outstanding debt on revolving credit cards was down by 4.6% during the first half of tile year compared with the same period a year earlier. N) Even if the Fed’s announcement helps keep rates steady, or pushes them down, businesses do not expect customers to suddenly charge up a storm. O) "It’s not like, ’Oh, credit is so cheap, let’s go back to the heydays (鼎盛时期),’" said Elizabeth Crowell, who owns Sterling Place, two high-end home furnishing and gift stores in New York. "People still fear for their jobs. So I think where maybe after other recessions they might return to previous spending habits, the pendulum hasn’t swung back the same way." The author cites Xavier Waiter’s case to show that people now won’t buy things unless they have the money.
Rates Are Low, but Consumers Won’t Borrow With heavy debt loads and high joblessness, Americans are cautious. A) The US Federal Reserve (Fed)’s announcement last week that it intended to keep credit cheap for at least two more years was a clear invitation to Americans: Go out and borrow. B) But many economists say it will take more than low interest rates to persuade consumers to take on more debt. There are already signs that the recent stock market fluctuations, turbulence in Europe and the US deficit have scared consumers. On Friday, preliminary data showed that the Thomson Reuters/University of Michigan consumer sentiment index had fallen this month to lower than it was in November 2008, when the United States was deep in recession. Under normal circumstances, the Fed’s announcement might have attracted new home and car buyers and prompted credit card holders to rack up fresh charges. But with unemployment high and those with jobs worried about keeping them, consumers are more concerned about paying off the loans they already have than adding more debt. And by showing its hand for the next two years, the Fed may have thoughtlessly invited prospective borrowers to put off large purchases. C) Lenders, meanwhile, are still dealing with the effects of the boom-gone-bust and are forcing prospective borrowers to go to extraordinary lengths to prove their creditworthiness. D) "I don’t think lenders are going to be interested in extending a lot of debt in this environment," said Mark Zandi, chief economist of Moody’s Analytics, a macroeconomic consulting firm. "Nor do I think households are going to be interested in taking on a lot of debt." In housing, consumers have already shown a slow response to low rates. Applications for new mortgages have decreased this year to a 10-year low, according to the Mortgage Bankers Association. Sales of furniture and furnishings remain 22% below their pre-recession peak, according to SpendingPulse, a research report by Master Card Advisors. Credit card rates have actually gone up slightly in the past year. The one bright spot in lending is the number of auto loans, which is up from last year. But some economists say that confidence among car buyers is hitting new lows. E) For Xavier Walter, a former mortgage banker who with his wife, Danielle, accumulated $20,000 in credit card debt, low rates will not change his spending habits. As the housing market topped out five years ago, he lost his six-figure income. He and his wife were able to modify the mortgage on their four-bedroom house in Medford, New Jersey, as well as negotiate lower credit card payments. Two years ago, Mr. Walter, a 34-year-old father of three, started an energy business. He has sworn off credit. "I’m not going to go back in debt ever again," he said. "If I can’t pay for it in cash, I don’t want it." F) Until now, one of the biggest restraints on consumer spending has been a debt aftereffect. Since August 2008, when household debt peaked at $12.41 trillion, it has declined by about $1.2 trillion, according to an analysis by Moody’s Analytics of data from the Federal Reserve and Equifax, the credit agency. A large portion of that, though, was simply written off by lenders as borrowers defaulted on loans. By other measures, households have improved their position. The proportion of after-tax income that households spend to remain current on loan payments has fallen. G) Still, household debt remains high. That presents a paradox: many economists argue that the economy cannot achieve true health until debt levels decline. But credit, made attractive by low rates, is a time-tested way to increase consumer spending. With new risks of another downturn, economists worry that it will take years for debt to return to manageable levels. If the economy contracts again, said George Magnus, senior adviser at UBS, then "you could find a lot of households in a debt trap which they probably can never get out of" H) Mortgage lenders, meanwhile, burned by the housing crash, are extra careful about approving new loans. In June, for instance, Fannie Mac, the largest mortgage buyer in the United States, said that borrowers whose existing debt exceeded 45 to 50% of their income would be required to have stronger "compensating" factors, which might include higher savings. Even those borrowers in strong financial positions are asked to provide unusual amounts of paperwork. Bobby and Katie Smith have an extremely good credit record, tiny student debt and a combined six-figure income. For part of their down payment, they planned to use about $5,000 they had received as wedding gifts in February. But the lender would not accept that money unless the Smiths provided a certified letter from each of 14 guests, stating that the money was a gift, rather than a loan. "We laughed for a good 15 or 20 minutes," recalled Mr. Smith, 34. Mr. Smith, a program director for a radio station in Orlando, Florida, said they ended up using other savings for their down payment to buy a $300,000 four-bedroom house in April. I) For those not as creditworthy as the Smiths, low rates are irrelevant because they no longer qualify for mortgages. That leaves the eligible pool of loan applicants wealthier, "older and whiter," said Guy Cecala, publisher of Inside Mortgage Finance. "It’s creating much more of a divide," he said, "between the haves and the have-nots." "Car shoppers with the highest credit ratings can also get loans more easily, and at lower rates," said Paul C. Taylor, chief economist of the National Automobile Dealers Association. J) During the recession, inability to obtain credit severely cut auto buying as lenders rejected even those with good credit ratings. Now automakers are increasing their subprime (次级债的) lending again as well, but remain hesitant to approve large numbers of risky customers. K) The number of new auto loans was up by 16% in the second quarter compared with the previous year, said Melinda Zabritski, director of automotive credit at Experian, the information services company. But some economists warn that consumer confidence is falling. According to CNW Marketing Research, confidence among those who intend to buy a car this year is at its lowest since it began collecting data on this measure in 2000. L) On credit cards, rates have actually inched higher this year, largely because of new rules that curb the issuer’s ability to charge fees or raise certain interest rates at will. M) At the end of the second quarter, rates averaged 14.01% on new card offers, up from 13.75% a year earlier, according to Mail Monitor, which tracks credit cards for Synovate, a market research firm. According to data from the Federal Reserve, total outstanding debt on revolving credit cards was down by 4.6% during the first half of tile year compared with the same period a year earlier. N) Even if the Fed’s announcement helps keep rates steady, or pushes them down, businesses do not expect customers to suddenly charge up a storm. O) "It’s not like, ’Oh, credit is so cheap, let’s go back to the heydays (鼎盛时期),’" said Elizabeth Crowell, who owns Sterling Place, two high-end home furnishing and gift stores in New York. "People still fear for their jobs. So I think where maybe after other recessions they might return to previous spending habits, the pendulum hasn’t swung back the same way." The reason for people’s reluctance to take on more debt despite the low interest rates is that they are pessimistic about employment prospects.
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