You totally blow off the debt situation, which needs to be subtracted from that supposed wealth. Current U.S. Debt of $136,479 per every man, women and child.
Orthodox numbers? For someone who claims to know so much, how could you miss something so obvious?
In the first place, the personal savings rate is irrelevant. The way the government measures this is flawed because it tracks what is left of Americans' disposable income each month rather than calculating what people put in bank accounts, brokerages and other places. Look at the flows every month into mutual funds and other investments. It has to be coming from somewhere.
Instead of measuring that activity, the Commerce Department computes the personal savings rate (which is intended to only track current savings and not previously invested assets) by calculating monthly after-tax income from many sources, mainly wages, dividends, interest, rents and employer contributions to pensions, and then subtracting expenditures.
This method understates income and overstate expenses mostly because it does not count capital gains from the sale of stocks or homes as part of disposable income, but it does count capital gains taxes as expenditures. It also counts the purchase of a car, in a lump sum rather than dividing it up into payments as most people do.
Just because Americans spend prolifically doesn't mean they don't save. The U.S. Treasury data shows that Americans have earned $3.5 trillion in capital gains since 1997. This is more than the combined gains of the preceding 20 years. Household net worth is almost $49 trillion dollars which is twice what it was just a decade ago. Before you jerk your knee, please be aware that only about 20% of this wealth comes from homeowner equity. How much wealth do we have to create Paul, until you think it's OK to spend some?
Median family net worth is more than $100,000 which is up 52% in constant dollars from 1995, when it was $66,000.
With regular savings, Americans save about 5% of disposable income which has not varied much over the past 15 years.
Bloviate all you want about depreciation, orthodox numbers, houses made of cards and the imminent depression. The fact is, American's are richer now than at any other time in history.
You totally blow off the debt situation, which needs to be subtracted from that supposed wealth. Current U.S. Debt of $136,479 per every man, women and child.