Resisting credit pressure

CONSUMER debt in the United States reached a record 19 percent of disposable income in September. Should we be worried? Not necessarily, from the economists' point of view.

A goodly chunk of that debt was accounted for by auto sales. Car dealers slashed prices at the end of the model year and offered concessionary financing. By October these fire sales were over, and retail sales fell dramatically.

Buying when the price is right, and holding off when it's not, is surely the kind of rational marketplace behavior to be expected. There can be sound reasons to buy on credit, and taking advantage of short-term favorable prices is one of them.

Moreover, the debt-to-income ratio isn't the only one that bears looking at; there's also debt-to-wealth. Although the length of the current economic recovery -- in its fourth year already -- makes some people nervous, personal income is still rising, and the bull market has plumped up the net worth of many investors. The consumer debt level is explained in part by new borrowers in the marketplace; it's not just veteran plastic-flashers going wild.

That said, it is still well to remember, as we fan out through the department stores and shopping malls this month, that an exercise of credit is not an end in itself. With credit so readily available, it can be too easy to forget the virtues of modesty, simplicity, and self-control.

The importance of Christmas sales to the retailers' total profits is so heavily stressed that anyone who decides to hold the line on holiday spending can be made to feel somewhat unpatriotic.

C'mon, let 'er rip, we hear from all quarters; go ahead and buy him/her/the kids/yourself that sports car/mink coat/VCR/computer. You don't want to push the country into recession, do you?

These may be perfectly appropriate gifts; but the real gifts are of ourselves, of our caring, not just of our credit lines. Even in the most affluent times, the most touching gifts may be the two-dollar doodad, the little stocking stuffer bought because the giver had noticed that the recipient would like such a thing.

In the end there is no substitute for listening to the people in our lives, for really paying attention to their desires and aspirations, and for giving gifts that will help them along the paths they have chosen.

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