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Americans have record wealth, but arenít spending it
Washington Post ^ | 06/17/2013 | Robert Samuelson

Posted on 06/18/2013 5:50:17 AM PDT by SeekAndFind

In the economic history of our time, June 6, 2013, ought to occupy a special place. That’s the day the Federal Reserve disclosed that the net worth of American households — the value of what they own minus what they owe — hit $70 trillion, a record that exceeded the previous peak before the 2007-09 financial crisis. Higher stock prices and a long-awaited housing recovery are slowly restoring Americans’ lost wealth. By all rights, this symbolic crossing ought to improve confidence, prompt consumers to spend more freely and increase the economy’s growth.

Maybe it will. But don’t hold your breath.

The “wealth effect” isn’t what it used to be. For those who have forgotten, this refers to households’ tendency to spend some part of their increased real estate and stock market wealth and thereby boost the economy. During the boom years, Americans borrowed lavishly against rapidly appreciating home values. One Federal Reserve study estimated the extra cash at $700 billion annually from 2001 to 2005. Now psychology has changed. Careless optimism has given way to stubborn cautiousness. Wealth gains don’t translate into similar amounts of higher spending.

(Excerpt) Read more at washingtonpost.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: savings; spending; wealth
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1 posted on 06/18/2013 5:50:17 AM PDT by SeekAndFind
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To: SeekAndFind

bfl


2 posted on 06/18/2013 5:51:40 AM PDT by Yardstick
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To: SeekAndFind

Does anyone really believe what the Federal Reserve says?

Does anyone believe what the Washington Post says?


3 posted on 06/18/2013 5:53:59 AM PDT by Venturer
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To: SeekAndFind

I highly doubt it


4 posted on 06/18/2013 5:54:19 AM PDT by yldstrk (My heroes have always been cowboys)
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To: SeekAndFind

Welcome to the Obama Economy. In it, anyone taking these type of loans is a fool. And anyone taking an ARM for more than a year is sitting on a powder keg.


5 posted on 06/18/2013 5:54:59 AM PDT by sr4402
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To: SeekAndFind

Consumers are up to their eyeballs in credit card debt and are trying to pay off the bills run up during Obama’s never-ending recession. Many have unemployed sons and daughters living back at home, some with children. It will only get worse next year, when ObamaCare robs the Middle Class of what little savings they have.

This is the real world outside the enclaves of the wealthy and government workers with cushy salaries and benefits.


6 posted on 06/18/2013 5:55:02 AM PDT by txrefugee
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To: SeekAndFind

When socialists rule, people hold on to what they have. We can’t spend money that we may need to survive on later.


7 posted on 06/18/2013 5:56:08 AM PDT by John O (God Save America (Please))
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To: SeekAndFind
you mean those Americans whose homes weren't foreclosed on. And those Americans who didn't drain their 401K's to survive the Second Great Depression.

File under Insult-to-Injury.

8 posted on 06/18/2013 5:58:05 AM PDT by schm0e ("we are in the midst of a coup.")
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To: SeekAndFind
The left is thinking: "70 trillion ripe for confiscation".
After all, people aren't using it.
Please tell me I'm wrong.

9 posted on 06/18/2013 5:59:26 AM PDT by BitWielder1 (Corporate Profits are better than Government Waste)
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To: txrefugee
*Many have unemployed sons and daughters living back at home, some with children. It will only get worse next year, when ObamaCare robs the Middle Class of what little savings they have.*

Hey!

You know what will fix the economy and help out of work Americans?

Open the borders, let tens of millions in!

That's the ticket!

.....at least that's what they're voting on soon...

10 posted on 06/18/2013 5:59:32 AM PDT by PATRIOT1876 (The only crimes that are 100% preventable are crimes committed by illegal aliens)
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To: Venturer

LOL-

I believe them when they just told us more people are
unemployed- now inching backup- and the biggest
decrease of workers EVER in the work force is really...

A GOOD thing!!

Orwell never wrote fiction- he really saw our immediate Future.


11 posted on 06/18/2013 6:00:14 AM PDT by mj1234
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To: BitWielder1

that is exactly what the thieves are thinking


12 posted on 06/18/2013 6:00:19 AM PDT by yldstrk (My heroes have always been cowboys)
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To: SeekAndFind

The national debt is a quarter of that and growing every day. We don’t have to spend it. Washington is already doing it for us.


13 posted on 06/18/2013 6:01:54 AM PDT by tacticalogic ("Oh, bother!" said Pooh, as he chambered his last round.)
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To: SeekAndFind

Americans need to re-industrialize our own nation.

Now.

We do not have a great deal of time. Forget about Obama. Think of global geo-politics.

Everyone on the world is increasing in productivity, and all the armies in the world are becoming more formidable.

Except America’s. Our industry is being off-shored, and our industry is being sold. Has been now for nearly 30 years.

One after another. Sold. Millions upon millions of formerly productive Americans, now unemployed and on government support.

Forget about Obama. Stop selling off American factories, and start bringing home American jobs once again.

Now.


14 posted on 06/18/2013 6:02:06 AM PDT by Cringing Negativism Network
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To: SeekAndFind

Yes. Record wealth Weimar Republic style. Just wait until gasoline hits $9.00 per gallon like that idiot Steven Chu wanted. Then we will really be wealthy!


15 posted on 06/18/2013 6:03:22 AM PDT by Jimmy Valentine (DemocRATS - when they speak, they lie; when they are silent, they are stealing the American Dream)
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To: SeekAndFind
Higher stock prices and a long-awaited housing recovery are slowly restoring Americans’ lost wealth.

And what's going to happen when Bernanke quits pumping a trillion dollars a year of Fed money into the stock market?

16 posted on 06/18/2013 6:03:30 AM PDT by E. Pluribus Unum (People with religious faith in government are far crazier than people with religious faith in God.)
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To: Jimmy Valentine
Yes. Record wealth Weimar Republic style. Just wait until gasoline hits $9.00 per gallon like that idiot Steven Chu wanted. Then we will really be wealthy!

Chu, like his fellow travelers, is a misanthrope.

He looks at those peasants out there cluttering up his landscape, depriving him of the Walden paradise he deserves, and he wants them all dead.

17 posted on 06/18/2013 6:05:40 AM PDT by E. Pluribus Unum (People with religious faith in government are far crazier than people with religious faith in God.)
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To: SeekAndFind

$70 trillion isn’t what it use to be

literally

in ‘bush dollars’, that’s about $35 trillion


18 posted on 06/18/2013 6:07:42 AM PDT by sten (fighting tyranny never goes out of style)
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To: SeekAndFind

“By all rights, this symbolic crossing ought to improve confidence, prompt consumers to spend more freely and increase the economy’s growth. Maybe it will. But don’t hold your breath.”

Why would it prompt people to do anything but sew gold into their mattresses, with a Che Guevara want-to-be in the White Hut?


19 posted on 06/18/2013 6:10:35 AM PDT by SharpRightTurn (White, black, and red all over--America's affirmative action, metrosexual president.)
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To: SeekAndFind

With the EPA and the IRS attacking productivity, why would anybody have confidence in their future earning power?

OBTW, as someone in the midst of moving, we have way more stuff than we need!

Pick a room in your house and make a trash pile and a charity pile.
Do this once a month and you’ll be surprised.

Don’t wait for a move.


20 posted on 06/18/2013 6:11:42 AM PDT by G Larry (Let his days be few; and let another take his office. Psalms 109:8)
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