Median Family Net Worth Under 1989 Level: Debt-to-Money Worst Since 62

As the stock market soars to new highs, here's some sobering statistics to consider.

The stock market is at an all-time high but Americans Owe More, Save Less, and are Poorer Than in Decades.

Negative Wealth Percentage On the Rise

Sobering Stats

  1. A greater share of Americans have more debt than money in the bank than at any point since 1962, according to Deutsche Bank economist Torsten Slok.
  2. 30.4% of US families have negative net worth despite the recovery in housing and the stock market.
  3. Median net worth is below where it was in 1989.
  4. Inflation adjusted, net worth may be the worst in history. $78,000 is not worth what it was in 1989, to say the least.

Mike "Mish" Shedlock

So long as reward gets privatized and risk is socialized, we should be good.

sarc /

Why is anyone surprised by this? As we become increasingly socialized, the trend will continue. Ultimately, the economy will be unable to support the burden of the benefits it has promised, and collapse

The growth of the economy has always come from small businesses, not big businesses. The dramatic increase in regulations and requirements makes it harder and harder for small businesses to survive, much less prosper. As an example, consider the $15/hr minimum wage. Small restaurants get crushed, while big chains can develop and install kiosks for ordering and robots for cooking. The net result is to decrease employment for low income, crush small restaurants, and create a protected environment where big business can thrive and be profitable (since they have less competition), even if they aren't creating jobs or wealth for the masses. It's a perfect example of a regulation that looks as if it is intended to decrease the disparity of income between low income and high, but which dramatically does the opposite. The net result of all regulation is almost always higher wealth for the rich, and lower wealth for the country as a whole.

The Fed is now so far over the event horizon, it has no choice but to continue the agenda. This doesn't change until they own all of the "Things," including private debt, equities and pensions. Hard to know exactly what happens then, maybe something like "Fed Coin," supposedly "equally" distributed among the public in the form of a guaranteed income, or maybe just a totalitarian regime change of some sort that transfers all the means of production to the rulers? Such is the evolutionary process of the destruction of democracies. Don't mean to be hanging crepe, but now might be a good time to update the passport and be scoping out possible greener, less obtrusive pastures, before the "Wall" goes up? And preferably before the Paramitarization of local law enforcement entities reaches crittical mass?

"critical" This return key submitting is bullshit.

Earlier in this thread someone has made the point that regulations and general government activity has reduced small business growth. You can add to that the impact of artificially low interest rates, which make it much harder for the middle class to save. Middle class savings are what fuel the investments in small businesses, enable purchase of a first home, finance sending the kids to college and providing for one's retirement. By crushing interest rates below the rate of inflation, the society becomes one of borrowers, and enhances the wealth of the powerful who can tap the cheap loans available from the carry trade. Artificially low interest rates from the Fed exacerbate the wealth gap, generally impoverish the society, and create a debt dependency which makes the society far more fragile.

@clovisdad Well said. The destruction of yield means we are all eating seed corn. Some people are getting paper rich at the moment, but this is not connected to a growth in capital, as it should be.

Hi Mish. Would this be a more useful analysis if it was focused in on various age levels? Lumping people under 30 into the total skews it downward, young people haven't had enough time to build much positive net worth, especially those who borrowed heavily for college.

Addendum to above comment: For example, if I look at my net worth level as compared to all households, I am in a much higher percentile than if I look at the net worth of those above 55. I'm 68.