Another report today was Consumer Credit. Consumer Credit fell $14.8 Billion in Sept. (Released today.) This was extending a long string of months in which consumer credit has fallen.

Debt to Income ratio also fell, although it is still high. This ratio has also fallen every month for a good string of months.

We already know that people are buying less and are mostly buying at discount. Now we see that Americans are finally working their way out of debt. This can only be good for working Americans.

What is the danger in this, though?

[The following is just me opining.] This trend for certain hurts retailers. No problem here. The US is gigantically overbuilt with pushers-of-worthless-crap. Also, I don't think this could lead to any intervention against working Americans by the government.

The danger is that this also reduces the tax revenue of government, Federal, State, and City. Governments don't like it when their tax revenue shrinks. Governments have power--and, lots of it. People with power don't give up anything easily. We are already seeing increases in property taxes, auto registration fees, and the like. They are giving out traffic tickets like I've never seen before, mostly using intersection cameras. Soon there will be fines for this, that, and the other.

I sometimes give the ordinary American too little credit. When things get really tight, as things are getting now, even Kwanbots sometimes make practical choices. I'm guessing that as things get desperate, Americans will make choices that thwart any government attempt to keep its revenues up. The FEDGOV can just order their computer geeks to create money out of nothing. The states and cities can not.

How will this play out? What will the states and cities do then? I don't think they will just roll over and give up.

Anyway, stop buying stuff you don't need, and if you are in debt, pay it off as quickly as you can.

Mike