The answers to all your questions may be found here: If that's the place you're relying on for your information, it's no wonder you're as misinformed as they are.
One suggestion is go back to school and work on your MBA.
I learned long before grad school that any discussion about liabilities is meaningless without understanding assets. You seem fixated on only one side of the equation, which has been pointed out to you numerous times as being the source for your unmitigated doom. Net worth is simply assets minus liabilities. When you do this you'll find that our household net worth is $51 trillion - an all time record.
Maybe you can explain, in your own words, why a trade deficit is bad and why a capital account surplus is bad. Japan and Germany run massive trade surpluses. Would you rather have Japans long recent history of deflation/recession or Germany's low GDP and 12% unemployment?
I'm not going to debate with you on your hypothetical terms. I know all about your one-sided asset theories. The truth is that you have over-weighted your assets. The truth is that if major assets in the U.S. (i.e. housing, stocks, etc.) are
grotesquely overvalued, it is useless to talk about asset values. Net worth is a relative figure and fluctuates. Nada por nada.
One small example: Just look at Haiwaii. People who bought a median priced homes in September for $ 600,000 just lost $ 150,000 in December. That is how much their home fell in value in three months. Real estate value is only one half of the equation. What happens when the mortgage company demands the buyer pay the difference because the home has lost value?
Another example: A good friend of mine has a beautiful six bedroom house. He owns it outright. He paid $ 50,000 cash for it 35 years ago. It was valued by his realtor at $ 1.5 million. So he has listed the house for sale. But my friend understands that his home is overvalued by at least $ 800,000. His house is for sale, but no one has even looked at the house for 60 days.
By your way of thinking, my friend's net worth is $ 1.5 million (excluding all his other assets). But he knows that his true net worth is closer to $ 700,000.
Of course, if you are correct, my friend is due for an $ 800,000 windfall. The answer you leap at repeatedly tells you to borrow even money. There are so many things to buy, and so little time to do it. "More, more, more," is the American way.
germany has massive trade surpluses because germany with a strong industrial base benefits from the growth in many parts of the world.
germany archived to improve it´s competitiveness every year during the last six or seven years because of lower labor costs and a growing productivity.
That´s why germany is the only G8 country winning market shares on the world market.
The big difference between the US and countries like germany is domestic demand. germans has faced high costs and uncertainty because of the reunification with transfer costs of 5% GDP every year for the last 15 years. They react to these problems with low consumption and high saving rates. Good examples are the real estate market, retail business or the construction business (the decline represents -0,9% GDP every year during the last decade).
The US growth is based on consumer confidence and high consumer spending.
While your example with the net worth is correct the question remains if the increase is "healthy". If that´s the case the US economy will keep growing perhaps at a lower level but we will see growth. The key factor is consumer spending if americans want or can no longer increase their spendings the consequeses are clear. by the way i never understood the attitude of using home equity ( or better a higher value) for consumption because these are not realized gains until the day you sell your house.
Your income should limit your spending and no company could ( or would be allowed to) behave like that at least no shareholder would invest in such a company.
Your debt burden has to be payed by your income and not by the value of a house (especially immobile assets like houses do not qualify for such a behavior)
If people are forced to sell their house you can imagine what happens to a market when a certain percentage of people are forced to do so.