Consumers Cut Credit, Big Time

6:23 pm EST September 8th, 2009 | News | 2 Comments

This is good news.

Consumers slashed their borrowing in July by the largest amount on record as job losses and uncertainty about the economic recovery prompted Americans to rein in their debt.

Economists expect consumers will continue to spend less, save more and trim debt to get household finances decimated by the recession into better shape. However, such action is a recipe for a lethargic revival, as consumer spending accounts for 70 percent of economic activity.

While it may slow the recovery some, its better to have an economy not so dependent on credit – especially for citizens.

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2 Responses to “Consumers Cut Credit, Big Time”

  1. Matt Osborne says:
    September 8, 2009 at 7:08 pm

    Yeah, this is why you have STIMULUS SPENDING to take up the slack.

    C + I + E + G = GDP

    The equation’s known to every ECON 101 student.

    C = consumer spending
    I = investment spending
    E = exports
    G = government spending

  2. Jaim says:
    September 8, 2009 at 9:54 pm

    Kind of a mixed bag. We need people spending right now for job growth but. . . We don’t need people to over-leverage themselves again.

    Slow and steady recovery. The stimulus is working as it should.

    Meanwhile, DOW 9,500.

    Dennis? Dennis?