LEVERAGING is when a household or a business borrow money to spend or invest and there has been an increase in household credit debt from the 1950s until 2008.  It means you are spending more than you bring in.  DELEVERAGING is the opposite.  It occurs when you pay off debt rather than take on more and that means you are spending less.   When the entire country deleverages, it means economic growth is going to be slow.   Economic growth will continue to be slow as long as the outstanding debt continues to shrink.  Deleveraging does not happen often and when it does it is painful for the national economy.  The good news is that the deleveraging cycle appears to be ending.  As Americans spend then the economic output comes from consumption.  Almost 65% comes from economic output.  All this from Dr. Mark Dotzour, Chief Economist and Director of Research at the TX A&M Research Center.