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

Comments (22)
No. 1-22
Stuki
Stuki

The Feudal societies America was founded to get away from, worked the same way: The serfs nominally had to work off “their” debts, or “pay rent” to farm someone elses poppeti. Ditto corporate towns/gulags.

Which supposedly justified simple slavery. At least in the minds of simple idiots.

Things are never different this time, no matter how loudly the progressive indoctrinati have been told to support “their” assigned “leaders”, by dutifully chanting they always are.

JanNL
JanNL

When did American parents stop teaching their children that debt for consumption is BAD, BAD, BAD. Must have been 50 years ago when the banks started pushing credit cards and the babyboomers allowed themselves to be hooked. As a foreigner I remember being amazed decades ago with all the toys people gathered in their double garages.

Sechel
Sechel

the stock market is not the economy. when i hear that america is fixing the economy and the example pointed to is the stock market i cringe. and the stock market can't solve the indebtedness of the average american when the mean balance is under $100,000 but more importantly the median at roughly $26,000.

Sechel
Sechel

@JanNL The savings behavior is something associated with people who grew in the great depression or were born of the holocaust. that's a generation that is no longer part of the american experience. Banks may be facilitating the behavior, but they are not the cause.

JonSellers
JonSellers

Map productivity increases to median wage increases over that period and you will find the problem.

MishMash
MishMash

There is no ASSet price as over inflated as american pu$$y. As long as that remains the case, males who chase these mediocre hose will be broke AF and those females .. well they're always broke.

KidHorn
KidHorn

If the unpaid balance of a mortgage is included in the debt without including the value of the home, then this is no surprise. I would have expected the numbers to be worse.

AlexSpencer
AlexSpencer

Explains the forty year history of cutting tax revenues while increasing spending and pretending that will reduce government debt. A generation of politicians has promoted that idea for their entire terms of office and are now collecting generous pensions.

klausmkl
klausmkl

mish good read, thanx

Bam_Man
Bam_Man

And to add insult to injury, US life expectancy has dropped for the past two years in a row. A rare feat unseen in the so-called 'developed' world since the collapse of the Soviet Union almost 30 years ago.

RonJ
RonJ

"30.4% of US families have negative net worth despite the recovery in housing and the stock market." Does this percentage include every family's share of the 20 trillion national debt?

RonJ
RonJ

"When did American parents stop teaching their children that debt for consumption is BAD, BAD, BAD. As a foreigner I remember being amazed decades ago with all the toys people gathered in their double garages." Someone has to consume what is produced, otherwise it won't be. A lot of jobs depend on people doing stupid things with their money. I get ads in the mail for Viking River Cruises in Europe. The people in Europe and the U.S. for that matter, working for tourist dollars, depend on people who do stupid things with their money. When the iPhone came out a number of young co workers couldn't wait to spend $600 for a phone, with a $100 a month phone bill. The people who work at Apple, depend on that kind of stupidity, to remain employed.

Snow_Dog
Snow_Dog

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

sarc /

Carl_R
Carl_R

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

Carl_R
Carl_R

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.

AWC
AWC

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?

AWC
AWC

"critical" This return key submitting is bullshit.

clovisdad
clovisdad

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.

bradw2k
bradw2k

@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.

Steve Diamond
Steve Diamond

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.

Steve Diamond
Steve Diamond

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.