"Have you heard? It's in the stars..."

A blogger asks a fair question:

...if we were in a deep recession as bad as the media says, would people be spending what little money they had on stuff? In my own town, I stopped into a Kohls on Friday, to get some sheets for Ryan’s twin bed. The line for the registers started at the back of the store at the customer service counter! I had never seen that many people in any store before.

Here, I think, is the answer:

The U.S. credit-card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said.

The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.

"In other words, we expect available consumer liquidity in the form of credit-card lines to decline by 45 percent."

People are spending like mad because they still have plastic in their wallets. They do so in spite of the uncertain future. Some do so because of the uncertain future.

Suppose you lose your job and you psychologically resign yourself to the fact you will soon not be able to pay your creditors. Will you suddenly cut back your spending? No. You will max out those cards while you still can. In for a penny, in for a pound.

People understand what's ahead. When credit ends, when the plastic in your wallet serves no purpose aside from scraping the ice off your windshield, retailers and manufacturers will feel the pinch as never before.

Don't wax romantic about the virtues of the simple life: Most American jobs depend on the average person's willingness to buy crap he does not really need. When those purchases stop, the jobs stop.

Think you've seen some bad layoffs? It's gonna get a lot worse. I project 15 percent unemployment by June. Barack Obama will not be a popular person, although the fault won't be his.