DURHAM, N.C. - When I was a child, I would lobby my mother to let me open my Christmas presents early. Her most powerful antidote against my pleas was a story she would tell about the year she and my father, living far from their relatives before I was born, opened their Christmas presents early. They woke up on Christmas morning to nothing under the tree, and spent the rest of the holiday feeling depressed and angry at themselves for having squandered their holiday surprise.

If the current evidence is any indication, America could be headed for exactly that same holiday season -- a season with nothing under the tree. And for the exactly the same reason: because The Cash for Clunkers program, which ended Monday, has effectively opened the holiday gifts early this year.

Subsidizing automobile purchases through the Cash for Clunkers program put plenty of cash in the hands of auto manufacturers, but it did so by taking sales away from other retailers. This is not only bad for retailers now. Ultimately, this could culminate in the worst holiday season on record.

There are two economic forces driving this. One is the substitution effect: when one good is suddenly priced lower than another, consumers buy more of the discounted product and less of other high-priced goods. Disappointing retail sales figures for July at places like Lowe's illustrate how consumers have redirected their purchases away from retail into subsidized automobiles. Money that would have been spent on paint, wallpaper and dishwashers was instead spent on automobiles because cars suddenly became cheaper.

But substitution also occurs across time. If prices are suddenly low today relative to tomorrow, consumers make purchases today and reduce tomorrow's spending. Spending that would have occurred in the fall has been shifted into the summer because cars in August were made cheap relative to holiday gifts in November. And that's only the first economic force that spells trouble for retailers this fall.

The second force is the income effect: the fact that consumers will now go into the holiday season with tighter belts than they otherwise would have. Consumers who traded 10-year-old clunkers for spiffy new cars available at subsidized prices took on additional debt to buy that new car. That debt reduces their disposable income, weighing on their ability to purchase retail goods in the fall.

What are the consequences of a bad holiday season for retailers? To be sure, a bad holiday season will prolong the recession. It will also dampen consumer confidence going forward, leaving us that much further from a consumer-led economic rebound than we already are.

But what if it's worse than that? What if the Cash for Clunkers program, by causing new car buyers to take on additional leverage at a time when they may be least prepared to manage it, actually causes consumer debt default rates to spike? This would truly be a disaster, and it is hardly a far-fetched scenario. Bank of America, for instance, is already reporting that credit card defaults are rising. A terrible retail season could amplify the consumer default effect, as lower seasonal retail demand will in turn mean lower seasonal hiring, which will mean less money in consumers' pockets for making credit card payments.

In short, the Cash for Clunkers program has caused many families to enter the holiday season with the family Christmas gift sitting in the driveway in August instead of under the Christmas tree in December. Let's hope that won't leave us even more depressed than we already are.