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The $800 Billion Question

Many analysts are poring over Black Friday sales figures and, soon, December returns as if these numbers hold the key to our economic future. If they’re good, perhaps the end of the recession is in sight. If they’re bad, it’s going to be a long 2009.

All of that assumes that it will be business as usual in the U.S. economic cycle. It’s bust now, so we’re chastened and pinching pennies. But in due time we’ll get our groove back and start spending again.

I’m inclined to think this will indeed happen. But there’s a number that keeps popping up in my mind, courtesy of Boykin Curry. It’s $800 billion. That’s the amount Curry says U.S. consumers spend every year over and above what they earn.

As our erstwhile investment banks have learned, leverage is great — until you’re called on it.