Ed Huntress wrote:


"...credit card and revolving debt is way down
today they continue to decline as people
pay off old debt and refuse to create new debt
what was going to debt service then
is now going into savings "

Last numbers I saw revolving debt was down 4% for January


"You haven't explained how that is going to happen
prior to 2008 employment and earnings was driven by spending
And the money for spending was coming from
the money made available by private borrowing
that has come to an end "

Total private sector borrowing is still headed down.




"That level of borrowing isn't coming back anytime soon"

Still True.



http://groups.google.com/group/misc....47144af8?hl=en

That was a discussion you had with John Carroll last June, about
consumer borrowing and consumption.

I can't remember what all I said 8 mos ago,
but it sounds like much of the statistics are
still true.



"Before the financial meltdown the US private sector was
spending $4 trillion more than they were bringing in and
that is the cause of the current mess.

That is correct the private sector added an
amount equal to 30% of GDP to its debt in 2007.

now the private sector is subtracting an amount about 8%.

You won't see the level of credit expansion
that existed in 1998-2008 in your lifetime.




"Today the private sector is paying back its debt and saving which
means the private sector is grossly under-spending its income. "

Still true. Latest figures indicate about 8% less than income.



"We don't have a problem with too much production
the problem is that people are now buying less of the goods and
services that businesses produce for a reason.
The reason they are buying less is because they are borrowing less
and paying down old debts and saving against an insecure future."

Still true.


That was a discussion you had with RD and emoneyjoe, last September.

If you didn't intend to say "[t]hat level of borrowing isn't coming
back anytime soon," then you could just say, "that was then, and this
is now." But it is soon. And it's baaaaaack. Which you once told me
wasn't going to happen, when I said it probably would. d8-)

Well sorry to disappoint you but credit expansion is
not back and it is not coming back anytime soon.
Very low interest loans to college students has propped
up consumer lending statistics.
Car loans are up a little from their low point.

But consumer loans are only 5% of total credit market debt.
You are looking at a tiny change in a tiny segment of the
credit market.