It is odd how the financial press assumes that consumer spending will increase as consistently as the sun rising. Every year the financial press writes a thousand pieces on how much Christmas spending is up.

Why do they make this assumption? In this decade median and average household incomes are either down or flat (depending upon the measure). From what source can consumers spend more?

The answer of course is debt. However, it appears that American households have wised up and don’t want to take on more debt these days.

We might be able to forgive the financial press and the retail industry because obviously they live in a land of make-believe and wishful thinking that consumers can be induced to take on more debt to buy more stuff. The amazing thing is that many economists apparently think the same way. Why would it be shocking that consumers, who generally make less now than in 2000, who spent eight years borrowing, would now spend less while they pay off all those bills?

There is a technical term for this: Duh.