So is economic health returning? The short answer is no. The mortgage crisis has become so grave that some city governments are threatening to deploy their eminent domain powers to seize loans at high risk of default. Seven municipal governments, including three of the 50 largest cities in California, have declared bankruptcy. Wealth creation in America has become so difficult, and wealth destruction so common, that in many respects the recovery, which is not a recovery at all but a period of indefinite stagnation, has become worse than the “Great Recession” that allegedly ended in 2009.The Federal government apparently wants as many people as possible to go down with the ship...
The long answer is also no. A June Federal Reserve study revealed that the median value of pretax family income fell 7.7 percent between 2007 and 2010; during the same period, median net worth declined a whopping 38.8 percent, and mean net worth dropped 14.7 percent. The Fed’s quarterly flow of funds reports have consistently shown flat household net worth since 2010. At $62.9 trillion in the first quarter of this year, household net worth is still almost $5 trillion below where it was in 2007.
As if having fewer dollars weren’t bad enough, the dollars have been, according to the strict definition of the word, decimated. Consumer Price Index inflation has robbed the dollar of 10 percent of its value since 2007. With the interest rate on a savings account below 1 percent, saving money in the bank has come to mean losing your money, and not slowly.
Friday, September 14, 2012
Worse Than The Disease
How the recovery isn't happening: