Guest / Limited Access /

The recession has American families cleaning up their balance sheets. Households paid off nearly 1 percent of their debt in the third quarter of this fiscal year. For the year, household debt shrunk nearly 1 percent, the first such shrinkage recorded. Credit card balances are shrinking as well, though perhaps because credit card companies aren't lending so easily anymore, and mortgages certainly aren't growing. This household balance sheet repair is the first such showing in more than 50 years.

Despite January's unexpected 1 percent rise in retail sales, Americans are paying off their debts. Reuters reported in November, "Consumer spending excluding autos fell 3.8 percent last month on a seasonally adjusted basis, steeper than the 1.5 percent decline in October." American families increased their savings to 3.6 percent in December, according to Charles Schwab, up from almost zero a year before.

Consumption goes underground

While the uber-consumption of the last 18 years has ended, old habits are hard to break. While people are spending less because they have less, shoppers are still spending what they have.

During the last recession, it made sense (to some at least) to encourage shopping, traveling, and theater-going. "Get on board [airplanes]," former President George Bush said. "Do your business around the country. Fly and enjoy America's great destination spots. Get down to Disney World in Florida. Take your families and enjoy life, the way we want it to be enjoyed." (The approach apparently continued to have appeal in the Bush White House during the current recession, though Bush's economics adviser admitted that "the president going out and telling people to go shop probably would not get the financial sector back in shape.") ...

Subscriber access only You have reached the end of this Article Preview

To continue reading, subscribe now. Subscribers have full digital access.

Read These NextSee Our Latest
Subscriber Access Only My Top 5 Books on the Black Experience in America
Pastor Bryan Loritts chooses 5 books to help evangelicals understand African-American hopes and anxieties.
RecommendedRemembering Prince: A Pop Music Priest in a Secular World
Remembering Prince: A Pop Music Priest in a Secular World
He seemed to defy mortal boundaries, but in fact, he showed us the glory of simply being made in God's image.
TrendingChristians Can Hold Their Bladders and Still Shop at Target
Christians Can Hold Their Bladders and Still Shop at Target
Consider the missional implications before you boycott.
Editor's PickReading Esther in the Shadow of ISIS
Reading Esther in the Shadow of ISIS
A Jewish philosopher’s perspective on how God delivers his people from radical evil.
Christianity Today
It Takes More Than a Recession to End Consumption
hide thisAccess The Archives

In the Archives

February 2009

To continue reading, subscribe now for full print and digital access.