The National Retail Federation warns that those who charge $1,000 worth of Christmas gift-buying and pay only a $25 minimum back on the total purchase will not have the amount paid off until 2014. The additional interest for the slow payback at 15 percent adds up to another $370. “Paying with cash is the best way to add a safety brake during holiday shopping,” the federation said. How much will we spend on gifts? The household average this year is expected to be $682.74, a 3.2 percent decline from 2008. About 71 percent of consumers plan to use cash, check or debit cards as the primary payment method. Credit card purchases are expected to decline by 10 percent. And the really bad news? An estimated 6 percent of adults, or about 13.5 million Americans, are still paying off debt from last year’s holiday season.
WSJ: rebuilding
The Wall Street Journal recently hosted a group of nearly 100 CEOs from around the nation who together employ 6 million people and represent $2 trillion in market capitalization. Here’s a summary of the Journal’s special report “How to Rebuild Global Prosperity.” The group’s top five priorities were:
- Government should focus on policies that stimulate sustainable job growth. Policies should emphasize small and medium-sized enterprises and ensure the flow of credit to business.
- Education is an urgent national priority, well ahead of health care, climate change and financial regulatory reform, said those attending the Journal conference.
- Change the tax code, in revenue-neutral fashion, to encourage savings and investment and discourage consumption and debt over the long term.
- The U.S. should encourage all domestic energy supplies, including coal, expanded access to oil and gas from both conventional and unconventional sources, nuclear power and all renewables. Government should not pick winners; let the market decide, the CEOs said.
- Reform medical malpractice. Cap awards and legal fees, and create health courts.
For more, visit WSJ.com/report.
A year of recovery
Portland economist Bill Conerly is out with his latest Businomics newsletter. This time, he’s saying the “recession is over, but it will be a year regaining all the lost ground.” Conerly sees consumer spending starting to loosen up and orders for business equipment beginning to improve. But, he said, “do not get sucked into buying yesterday’s hot asset.” That would be gold. To subscribe, visit conerlyconsulting.com.
