After decades of growing consumer debt that contributed to the global economic crisis, American consumers are being asked to do two contradictory things to help bring the United States and the world out of the crisis: Spend and save.

Christmas spending likely to disappoint many

MarketWatch reports that the madness of Black Friday, with all its sales and discounts, only brought in a half percent increase in retail sales. The Friday after American Thanksgiving is considered the official beginning of the Christmas shopping season, the most important period for retailers. The small increase in sales is a reminder that the American consumer, once considered the engine of the world economy, is still overstretched and cannot serve as the catalyst of another boom.

Spending was a bit stronger in the Internet world. "Analytics firm comScore said Sunday that U.S. online spending on Black Friday was the strongest it has ever been, up 11 percent over the prior year, with $595 million spent online," reported Reuters. Still that online figure is dwarfed by the $10.66 billion spent at brick-and-mortar stores on Black Friday.

The National Retail Federation noted that consumer traffic increased over the four-day period from Nov. 26 to 29, but total sales still only rose half a percent to $41.2 billion. "The higher turnout and lower average spending were in line with expectations, the NRF said. The group is sticking to a forecast for a 1% drop in spending this holiday season," reported BusinessWeek.

"For investors who were looking for material topline growth and a return of the consumer, that's not in the cards for 2010," Eric Beder, an analyst at Brean Murray Carret & Co., told Reuters. Many analysts had predicted that retail sales would improve since sales figures were so bad in 2008, at the height of recession and the credit crisis. For these analysts, this year's results are especially disappointing.

Why is this important? Because consumer spending makes up about 70 percent of the U.S. economy. Reuters says, "Economists and analysts are watching the holiday shopping season closely this year for signs consumers are willing to spend again."

Savings rate disappoints the rest

On the other side of the ledger are the realists who note that no society can continue indefinitely to borrow more than it saves. As the Bible says, "The borrower is servant to the lender" (Proverbs 22:7).

America, as the world's superpower with what has been the world's easiest currency to trade, has seemingly had a free pass. We have received the benefit of the doubt, though that benefit appears to be coming to an end. Up to this point, countries like China have sold us far more than they have purchased from us. And they have turned around and loaned trillions of dollars to the U.S. government to finance its debt.

A smaller, less powerful country that did not control the world's reserve currency would have been forced to shape up long ago. Government spending would have been curtailed, and taxes raised. Household debt, which grew as much, relative to income, from 2000 to 2007 as it had in the previous 25 years, would have been restricted. Personal savings, which reached a low of -0.7 percent in 2005, would have been encouraged.

As it is, the recession has forced many consumers to reduce their debt, and fears of unemployment have caused some to increase their savings. But the rate is still very low compared to most countries.

In fact, the only sustainable economic approach would be for Americans to save more and spend less. But this tough medicine has its dangers. We're in so deep, the prudent thing in the long run can be foolish in the short run.

Research from the McKinsey Global Institute shows that "each percentage point increase in the savings rate would reduce spending by more than $100 billion—a serious drag on any recovery."

And so we see economists and government leaders playing this precarious balancing act of encouraging people to spend, but not too much, and encouraging people to save, but not too much of that either.

On the microeconomic level of your own family, what are the prudent steps to take? The Bible contains a great deal of advice about the wise use of money, and we have collected much of it in a free resource called Managing Your Finances. Read it online or download your own copy.