Buying now, paying later skews the big picture.

IT'S holiday season prognostication time, that stretch in October when news organizations start fixating on whether this will be a good or a bad year.

A quick Google search will turn up whatever you want to hear. From the Detroit News: "Retailers Anticipate Rebound." From the Denver Post: "Holiday Retail Outlook Ho-Ho-Hum." From the Stockton Record: "Holiday Hiring Aplenty." From the Providence Journal: "Retailers Concerned Energy Costs Will Keep Customers From Stores." From the Miami Herald: "Low Retail Sales Suggest Consumer Anxiety."

Business desks treat the Christmas retail months as a kind of parlor game that has the season's expectations rising or falling by the latest government indicator. In the end, it's mostly nonsense because we all know that, barfing some cataclysmic event, Americans will visit their favorite malls and spend lots of money--perhaps not at price points that merchants would like, but enough to keep the GDP chugging along quite nicely for another quarter.

Fueling this spending, of course, will be plastic--and that, much more than sales guesstimates, should be the real focus of our attention.

In case you missed it, consumer debt rose by $4.88 billion in August, following increases of $6.5 billion in July and 514.96 billion in June. Americans now owe more than $800 billion in credit card debt, a 31 percent increase from 2000.

Meanwhile, the nation's savings rate was minus 0.7 percent in August, which means that Americans are borrowing or dipping into past savings to cover the costs they're incurring. It's not the first time that the country has fallen into the red zone, but the combination of massive debt and negative savings is putting the economy in an increasingly uncomfortable spot.

This being the economy, there's always another point of view, of course. In this case, it's that consumer debt can be a good thing because it generates more sales. That, in turn, keeps the retail folks in business and generates demand for making more products, which keeps the manufacturing sector happy, too.

But there are all kinds of debt. The good kind has you purchasing big-ticket items like cars and homes that provide an investment for your future well-being. The bad kind has you charging a $300 pair of premium jeans without enough cash in the bank to cover the next Visa bill. And as is painfully obvious, there's a lot of the bad kind going around.

Among low- and middle-income households, average credit card debt is $8,650, according to a survey by the Center for Responsible Lending. Seven out of 10 of those households reported relying on their credit cards for medical expenses or house repairs. And one in five paid off some of that $8.650 with a mortgage refinancing.

The center, a nonprofit advocacy group out of Durham, N.C., places much of the blame on factors beyond the control of those households--stuff like stagnant wages and higher medical costs. "If confronted with a layoff or health emergency there are few, if any, personal or public safety nets adequate enough to help," said Tamara Draut, co-author of the report.

Well, that's true as far as it goes. Consumers certainly have been caught in a squeeze between higher prices and wages that haven't kept up. But using macroeconomics to explain micro-spending is a bit misleading because it leaves out one important element: an inability to not spend money.

For several years now, shoppers have been conditioned to view spending as not only healthy but a kind of patriotic obligation--conveniently sidestepping the prospect of extending our debt for months or years at a time. It will happen again this Christmas, with folks spending many hundreds of dollars on gifts and only needing to shell out that $50 minimum payment each month.

But without adequate savings--or a sensible management of one's finances--it won't take much for the spending game to get out of control. If that happens on a broad scale, it will become the biggest economic story of our lifetime--a much bigger deal, in other words, than figuring out whether this will be a good or a bad year at the malls.

Mark Lacter is editor of the Business Journal. He can be heard every Tuesday morning at 6:55 and 9:55 on KPCC-FM (89.3).