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US Household Networth at 43-year Low

Posted on the 01 December 2012 by Eowyn

empty pockets

Obama’s Hope & Change is working!

Measured in median household net worth, Americans are the poorest we’ve been in 43 years. (Median is that number that divides a population into two halves.) For the first time since the end of World War II, average  family incomes declined for Americans in all income tiers.

CBS-DC reports, Nov. 30, 2012, that a recent study by New York University economics professor Edward N. Wolff found that the median net worth of American households has dropped to a 43-year low of $57,000 (in 2010 dollars), as the lower and middle classes appear poorer and less stable than they have been since 1969.

Wolff’s focus on total wealth not only measures how much money a household brings in, but also the amount it accumulates. This latter number is very significant — economically secure households are generally more comfortable spending their disposable income, and are less likely to become a drag on the social safety net.

Between 1983 and 2010, the percentage of households with less than $10,000 in assets (using constant 1995 dollars) rose from 29.7% to 37.1%. The “less than $10,000″ figure includes the numerous households that have no assets at all, or “negative assets,” which is otherwise known as debt. Over that same period of time, the wealthiest 1% of American households increased their average wealth by 71%.

As noted by Daily Finance, from 1983 to 2010 the share of total wealth held by the richest 10% of American households increased from 68.2% to 76.7%. Meanwhile, all the rest of Americans lost financial ground.

An August Pew Research Center study found that many in the middle-class are divided on how they believe this gap had widened. Fully 85% of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living. Of those who feel this way, 62% say “a lot” of the blame lies with Congress; 54% say the same about banks and financial institutions; 47% about large corporations; 44% about the Bush administration; 39% about foreign competition; and 34% about the Obama administration.

Just 8% put “a lot” of blame on the middle class itself.

“This downbeat take on their economic situation comes at the end of a decade in which, for the first time since the end of World War II, mean family incomes declined for Americans in all income tiers,” the Pew Report stated. “But the middle-income tier—defined in this Pew Research analysis as all adults whose annual household income is two-thirds to double the national median —is the only one that also shrunk in size, a trend that has continued over the past four decades.”

I’ll bet you $5 that when Professor Wolff undertakes an update of his study in 2016, he will find that Americans’ median net worth will have plunged even further, with “the rich” who remain in the United States also experiencing a decrease in their net worth along with the middle and lower classes. Already, almost two-thirds of the United Kingdom’s millionaires (defined as those who make a million pounds or more in annual earnings) had disappeared from Britain after the introduction of the 50% top tax rate.

This  is what the Left just refuse to recognize and accept:

The rich, like all human beings, exercise their free will. If their government imposes punitively high taxes on them, they will leave the country for more hospitable havens. The way to fix budget deficit and a crushing national debt is to grow the economy by –

  • Increasing incentives to invest;
  • Decreasing the disincentives to maintain and create businesses with a profusion of bureaucratic rules and red tape;
  • Encouraging in the people the virtues of hard work, frugality, and responsibility;
  • Discouraging in the people the vices of laziness, dependency, and an arrogant totally-unwarranted sense of entitlement to the fruits of others’ labor.

Needless to say, the Obama administration is not doing any of the above.

~Eowyn


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Add a comment

By Brandon J. Rodak
posted on 02 December at 13:28

Okay.... Lol. i hate politics. Especially when everything is pointed at gov and people dont look at themselves. But money isn't hard to understand. 1. Consumer debt is off the charts. People don't know how to hold onto their money. People spend what they don't have at an alarming rate. Spend less than you have. Simple. 2. People believe they invest in assets (such as a house... Which aren't assets)... They are liabilities and expenses. People should not be ashamed of 2 or 3 generations living in one house. It was done for centuries. If something doesn't make you money in return, it is not an asset. 3. People tend to blur their priorities. Black Friday shopping, or buying everyone presents is not important when you scrape by with your bills. New upgrade for your cell phone is not a priority. Priority in a nutshell, is responsibility. 4. You cannot expect to have an excess of money, if you don't work (and/or) hustle. Period. The gov will give you enough to take care of your needs. Not your wants. Which brings me back to point 3. If you receive gov aide, use responsibility to cover your needs, not wants. 5. Broke people tend to take advice from other broke people. They go with what they want to hear, not what they need to hear. Take advice on how to handle money from someone who keeps it. Not to be confused with someone who makes alot of it. Anyone can make alot of money but they probably have the problems stated in points 1-3.

Anyways. I don't know shit. So good thing there's awesome books that teach money handling principles such as; rich dad poor dad, think & grow rich, and richest man in Babylon. Once again, society's fault we don't teach financial literacy, but teach offspring to have everything they want. Yet, it's a good thing we have the US gov to point our fingers at.