Thanks to the free-spending American consumer, the current economic expansion has survived to the relatively ripe old age of three years. Many households have spent all their income, and then some. Americans have confidently, even feverishly, borrowed money in record amounts to buy everything from compact disk players to country houses. The level of home mortgage debt has increased by 37% since December 1982, to $1.5 trillion. At the same time, the total of installment debt, which includes credit-card purchases, department-store credit and the like, has surged by 67%, to $548.7 billion.
But the tide may be turning. Consumers seem to...
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