U.S. income growth is slowing. But rather than stepping back, and tightening their belts, American consumers are swiping their credit cards to maintain their spending levels.

“When your income is going down, and you’ve got a lot of bills, what do you do?” asks Hedgeye CEO Keith McCullough in the video clip above.

Let’s run through some numbers:

  • Income: Year-over-year growth has declined from 6.3% in 2014 to just 4.0% today
  • Revolving Credit: There’s been a commensurate rise in revolving credit over that period, from 3.6% to 5.8% respectively, to help plug the spending gap.

“Bankers are going down the FICO file to give them all the kinds of credit that they want,” McCullough says.

We don’t think this story has a happy ending.