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Household Net Worth Plunged By $1.5 Trillion in Q2 2010

And one wonders why the Fed, per Alan Greenspan's admission, is only focused on ramping stocks up to all time highs. Total household financial assets declined by $1.7 trillion to $43.7 trillion, which was the biggest swing factor, as the tangible assets, or housing, was kept flat at $23.7 trillion. Incidentally, to assume that Real Estate value increased in Q2 from $18.7 trillion to $18.8 trillion in Q2, is one of the dumbest things to ever come out of the Fed: we expect that this number will plunge soon after it is realized that the double dip in housing is here, forcing another major contraction in household net worth. On the other side of the balance sheet, liabilities were also flat at $13.9 trillion sequentially. And possibly the most important data point: the change in borrowings, confirmed that everyone is deleveraging except for the government... whose borrowing surged at a 24.4% SAAR, the second highest ever, after the 28.9% surge in Q2 2009. In other words, Keynesianism is alive an well in the US, and any talk of austerity in the US is nothing less than not that funny stand up comedy.

1 Comments in Response to

Comment by Ross Wolf
Entered on:

Can You Depend On A Socialist Government To Save Your Job/Economy?

Obama like most socialists has no understanding of economics. Even as the U.S. economy contracts, Obama’s only solution to the economic crisis is spend more, borrow more and print money While Americans continue to lose jobs Obama has added 123,000 government employees that enjoy high salaries and benefit packages most American workers can only dream about. It is clear Obama will have to strip working Americans of their assets, taxing anything and anybody to pay for his spending and public programs. No matter who is elected, Congress will have to hugely raise taxes to pay interests on increasing government debt. Obama’s planned tax increases in 2011 will increasingly confiscate Citizens’ discretionary income before it can be spent on goods and services, causing more unemployment—but not government employees, shrinking the private sector economy. Does Obama plan to extend forever unemployment benefits for millions of Americans? Why should anyone work? How does Obama intend to deal with millions of unemployed Americans after U.S. Taxpayers can't afford the costs of unemployment benefits for millions. Cuba, more realistic than Obama, recently announced it was cutting the number of government employees by 25% and terminating its long-term state paid unemployment or the government would go broke.

A turn around in the economy can’t happen with the Obama government  in the White House. The Obama government like foreign socialists is unfriendly to business and does not care their polices are drowning businesses with taxes, regulations and controls that will inhibit economic growth and employment for years. The Obama government  has made Americans afraid to invest, reluctant to spend money on goods and services, every month causing more Americans to lose jobs.

At the rate Obama’s is pushing America toward bankruptcy, it is obvious the U.S. will soon not have enough money to pay for a sufficient military defense to compete with China’s expanding military capability. For example, when Bill Clinton was President he helped China secure from the United States Cray supercomputers. It was obvious China would put the superior computing power to work for their military, particularly in nuclear and other missiles; the Chinese did. Now every U.S. navel carrier has been made obsolete, defenseless against Chinese missile attacks. It was recently reported China could destroy any U.S. naval carrier within 900 miles off its coastline. Someone should ask former President Clinton why he sold out the security of America helping China get the Cray supercomputers. If the Obama government doesn’t stop bankrupting America, the U.S. will soon not afford the costs of deterring its current and future enemies.

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