Household net worth in Q3 2011 has fallen to $57.4 trillion, and relative to GDP this is still well above historical peaks in the post-war period in the 20th century.
If total household net worth relative to GDP fell to the post-war historical peak before the recent silliness, at present levels of GDP this implies a further pull-back in total household net worth of roughly 7 percent, or $4 trillion, to $53.4 trillion.
In other words, we could come a long way toward rectifying both metrics almost instantly by taking from net worth and paying down mortgage debt, if only the tax man didn't stand in the way.
It should be emphasized that roughly $5 trillion of $18 trillion in retirement funds stands ready in IRA accounts alone to address this problem, if only government gave people the freedom to do so.
It should be emphasized that roughly $5 trillion of $18 trillion in retirement funds stands ready in IRA accounts alone to address this problem, if only government gave people the freedom to do so.
Another interesting point suggests itself.
The post-war average GDP of 3.5 percent per annum has utterly failed to materialize in the first decade of the 21st century, as GDP has averaged instead in the neighborhood of 1.7 percent per annum.
The post-war average GDP of 3.5 percent per annum has utterly failed to materialize in the first decade of the 21st century, as GDP has averaged instead in the neighborhood of 1.7 percent per annum.
Both net worth and debt measured against an economy pumping out 50 percent more GDP would mean I wouldn't be writing about this right now.
I'd be too busy relaxing and getting ready to make lots of money tomorrow.
There's more than one way to skin a cat: less meddlesome tax policy, or growth-oriented economic policy.
Preferably both.
There's more than one way to skin a cat: less meddlesome tax policy, or growth-oriented economic policy.
Preferably both.
