WASHINGTON — In January, after putting the kids to bed, Mary Morrill and her husband spread their monthly bills, grocery receipts and checkbooks on the kitchen table and began the first of several long nights finding ways to cut spending -- especially with credit cards.
They would pack their own lunches, write dinner menus to curb impulse buying at the grocery store, even cut out trips to McDonald's, which had been a treat for the kids and a convenience for the Morrills. And it all worked.
"We literally have not charged anything for almost a year," said Morrill, 39, who lives with her husband and two children outside Cedar Rapids, Iowa. "If anything, we really feel like the bad economy was a wake-up call for us. In the long run it's going to help us. It's a reality check."
The Morrills' ability to make and stick to their first family budget in nine years of marriage, as well as their success in paring down what had been more than $10,000 in credit card debt, may seem entirely admirable.
But as good as it may be for the Morrills themselves, their decision to batten down the hatches and stick to their newfound frugality month after month adds to a growing body of evidence that casts a potentially dark shadow over the economic future of the nation as a whole.
After the most punishing downturn in half a century, the U.S. economy has finally begun showing signs of renewed life. Stock prices and factory orders are up. The housing market appears to be stabilizing. Job losses are moderating. Overall, the economy has begun to grow, officials believe.
Welcome as all those developments are, many analysts worry that they may not be enough to offset another trend: the continuing refusal -- or in many cases the inability -- of millions of U.S. consumers to go out and spend money the way they did before the crash.
Because consumer spending accounts for a whopping 70% of all economic activity, a resurgence of spending by people like the Morrills is considered indispensable for a robust and sustained recovery.
In times past, when things got better, people went back to spending. This time, maybe not.
When American Express asked a sampling of 2,032 people late last month what they would do if they found $500, the answers were like a pitcher of ice water in the face of retailers. Survey respondents were offered a list of possible spending choices that included splurging at a restaurant, going on a shopping spree and taking a trip.
But a mere 10% or fewer marked one of those items. Most went down the list and checked off paying regular bills, reducing credit card debt or simply saving the money.
"What we see consumers doing is exhibiting a level of discipline that we didn't know," said Gail Wasserman, a spokeswoman for American Express, which like other card companies has reinforced the reduced- spending trend by issuing fewer cards and slashing credit lines to lower their own risks.
"It's very clear consumers have hit the reset button. They've reevaluated their priorities and separated their wants from their needs," Wasserman said.
How long this change in behavior will last is anybody's guess. But there's more than consumer psychology involved. Beyond the fears aroused by the recession's massive layoffs, lost homes, shriveled retirement savings and other setbacks are barriers to renewed spending that cannot be swept away by consumers simply regaining a sunny outlook.
To begin with, analysts say, there is the heavy load of indebtedness that U.S. consumers will be carrying when the recession ends.
Collectively, U.S. household debt rose to a high of 133% of after-tax income in 2007, double the percentage of the mid-1980s, according to Federal Reserve data.
That means Americans' total debt in 2007 amounted to a full one-third more than they earned in take-home pay and other forms of income. In other words, they were pretty deeply in debt and could not increase consumption -- and stimulate economic growth -- without going still deeper into the red.
With mortgage borrowing and consumer credit usage falling sharply in recent months, that debt-to-disposable-income measure has declined to 126% in the second quarter, based on Fed data released last week.
Early in the current decade, the ratio was 100% -- suggesting that at least consumption wasn't growing faster than incomes. But Fed economists in San Francisco have estimated that it might take another nine years to get that ratio down to 100%, and that assumes consumers will raise their savings rate from 4% currently to 10% at the end of 2018.
Such savings rates, while potentially good in the long term, would produce a substantial reduction in annual consumption growth, dragging down overall economic activity, these economists say.
To understand just how much debt the nation's consumers are carrying now, as they decide whether to return to their free-spending ways that sustained so much of the recent prosperity, consider: