One wonders how an economy that is 70% based on consumer spending can grow when consumers are paying down debt rather than spending.
(AP) -- Americans borrowed less for a 10th consecutive month in November with total credit and borrowing on credit cards falling by the largest amounts on records going back nearly seven decades.
November's $17.5 billion drop in total credit was the biggest amount in dollars terms since records began in 1943. That represents an 8.5 percent fall from the October borrowing level. That was the biggest percentage drop since total credit declined 9 percent in May 1980.
The borrowing category that includes credit cards fell by $13.7 billion, an all-time record decline in dollar terms. The drop was 18.5 percent from November, the biggest decline in percentage terms since a 29.6 percent plunge in December 1974.
The drop in overall credit for 10 straight months was a record in terms of consecutive declines, surpassing the old mark of seven straight declines set in 1943 and again in 1991.
Borrowing in the category that includes credit cards has fallen for 14 straight months, also a record.
This is a good thing in the long-run. It's just a bad thing in the short-run. That's why the government is fighting it with every method they have at their disposal.