Good afternoon, all.

We’re going all-in on this simple, scary formula: We spent our way into this mess; now we’re spending our way out of it. The problem? Only the government has money to spend right now.

With personal savings rates at an all-time low, I wonder where the money to drive the all-important consumer spending is coming from. In the Wall Street Journal last week, Meredith Whitney, Meredith Whitney Advisory Group CEO, explained that we’re going to charge it. A chunk:

Over the past 20 years, Americans have also grown to use their credit card as a cash-flow management tool. For example, 90 percent of credit-card users revolve a balance (don’t pay it off in full) at least once a year, and over 45 percent of credit-card users revolve every month. Undeniably, consumers look at their unused credit balances as a "what if" reserve.

Without doubt, credit was extended too freely over the past 15 years, and a rationalization of lending is unavoidable. What is avoidable, however, is taking credit away from people who have the ability to pay their bills. If credit is taken away from what otherwise is an able borrower, that borrower's financial position weakens considerably. With two-thirds of the U.S. economy dependent upon consumer spending, we should tread carefully and act collectively.

Good news: We’re not maxed out. Bad news: We need to keep charging.

Gotta ask, exactly how much time does that plan buy us? Because the numbers simply don’t add up.

Nationally, an average individual’s credit card debt inched up in Fourth Quarter 2008 to $5,729 from the previous quarter’s $5,710. The highest state average credit card debt was in Alaska ($7,466), followed by Nevada ($6,638) and Tennessee ($6,560). The lowest average credit card debt was found in Iowa ($4,267), followed by North Dakota ($4,414) and West Virginia ($4,555).

The South showed the steepest increases in average credit card debt Third Quarter 2008-Fourth Quarter 2008. Arkansas (4.2 percent), Mississippi (3 percent) and South Carolina (2.9 percent) lead the way nationally. Alaska, despite holding the largest balance, sported the largest drop in its average credit debt (-4.6 percent), followed by D.C. (-2.7 percent) and Washington (-1.6 percent).

(Sorry, the TransUnion study highlighted only the highs and lows, so they didn’t break out Georgia’s numbers alone.)

While perhaps manageable amounts (or at least not as frightening) in Good Times, a shrinking economy makes those numbers look bigger and bigger with each passing day. And that means it’s gonna start getting tougher on the folks holding those balances.

Nationally, the bankcard delinquency rate (the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards) increased to 11 percent over the previous quarter. Delinquencies were highest in Nevada (2.04 percent), followed by Florida (1.71 percent) and Arizona (1.54 percent). The lowest rates were found in Alaska (0.57 percent), North Dakota (0.70 percent) and Vermont (0.75 percent).

And trends for those numbers seem to be going up.

Here’s how Ezra Becker, TransUnion director of consulting and strategy, compared the 2001 recession to our current one. Here’s what he sees for the future:

... Although that recession was short by most standards (March 2001-November 2001), the bank card delinquency rate increased by almost 10 percent during that period. In comparison, we see that the national average credit card delinquency rate has already increased by 18 percent since the current recession began in December 2007, with future trends not particularly optimistic."

Yikes. In February, credit card users are paying back less of their outstanding balances each month, data from February show, setting the stage for deeper pain for issuers of plastic.

CNN broke down the numbers and meaning. A chunk:

Card users paid back 17.15 percent of their balance on average in February, down from 20.46 percent a year earlier, according to a Fitch Ratings index, which tracks about $ 285 billion of credit card loans.

Lower payments are actually desirable in a strong economy; when customers pay a minimum balance each month, issuers collect more interest on the unpaid balances. But this pattern is worrisome in an economic downturn because lower payment rates are a sign that borrowers will fall behind on payments.

Folks, we’re not trending in the right direction here. We’re being told how important it is for us to spend, but so many already did just that. Now, it’s time to pay the tab. And we’re having trouble doing that.

These credit card numbers are yet another indication of a broken system. We live by one set of rules; Wall Street gets to live by another set. While bailing out banks and making sure AIG gets its bonuses, regular workers are getting laid off, renegotiating contracts, taking pay cuts and furloughs. Where is the bonus for them? The double standard is an outrage.

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