There's much argument on the wires about the issue of inflation vs deflation. As James Quinn points out, the mainstream media aren't helping much because if they comment at all, they may still misunderstand what they're reporting. The official figures appear to show that debt in the US is reducing, but this needs to be reinterpreted in the light of write-offs:
If consumer debt was $13.8 trillion at the end of 2008 and the banks have since written off 5.66% of that debt, total write-offs were $800 billion. If total consumer debt now sits at $13.5 trillion, then consumers have actually taken on $500 billion of additional debt since the end of 2008. The consumer hasn’t cut back at all. They are still spending and borrowing. It is beyond my comprehension that no one on CNBC or in the other mainstream media can do simple math to figure out that the deleveraging story is just a Big Lie.
Reading around, it seems that a lot of credit card debt has been written-off, but better-risk customers may be increasing their usage, especially business owners (perhaps finding a way around the dearth in other forms of bank lending):
Credit cards are now the most common source of financing for America’s small-business owners. (Source: National Small Business Association survey, 2008)
44 percent of small-business owners identified credit cards as a source of financing that their company had used in the previous 12 months —- more than any other source of financing, including business earnings. In 1993, only 16 percent of small-businesses owners identified credit cards as a source of funding they had used in the preceding 12 months. (Source: National Small Business Association survey, 2008)
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