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News Link • Economy - Economics USA

Consumption Inflection Point - Consumer Spending Plans Plunge

Consumer credit has fallen an unprecedented 7 consecutive quarters. Moreover, credit is poised to plunge further as consumer spending plans are falling through the floor.

2 Comments in Response to

Comment by Doug Nusbaum
Entered on:

OK --- my bad.  I am old and my eyes are weak and the print is small.  I misread the chart.  Yes, credit change has been negative for 7 quarters.  Which given the preceding almost uninterrupted  growth for 40 years is probably a good thing.   After only two small reductions in credit over that time period, is it not time for a shrinkage of the money that is owed?  Does anyone really think we should keep spending for ever?  To me this is a good thing.

Comment by Doug Nusbaum
Entered on:

OK folks.  There is a difference between something and change in something.  If you have an acceleration of  .01g for a year you are going about 2000 miles per second.  Or a 1 g acceleration would have you going faster than light in a year.  If you look at the graph above you will notice credit actually INCREASED for 17 years.  There was never a period when credit did not grow.  That means that every year our debt grew.  Debt can not shrink unless credit is negative. 

Let me put it another way.  This statement is false:

Consumer credit has fallen an unprecedented 7 consecutive quarters.

 As long as the the percent change is positive, then credit is growing.  If the percent of change in my speed goes from 10% to 5%, then I AM STILL GOING FASTER, not slower.  In other words, the author of this article is some combination of lying, ignorant or stupid.



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