Thereported Tuesday that consumers ratcheted back their credit by a larger-than-anticipated $21.6 billion from June, the most on records dating to 1943. Economists expected credit to drop by $4 billion.That's good news, provided we aren't too rattled by the unsettling feelings that come with knowing that our top economists were off by a mere $17 billion. Haven't we heard for years that we spend recklessly and don't save enough, especially compared to more thrifty countries like Japan? Well, don't get too excited:
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.So if we simultaneously spend and save, everything should be just fine. What could possibly go wrong?