Is The American Dream Forever Changed?
So much wealth has been lost, and not just at the top.
Yahoo Finance has some sobering numbers…
There’s no question the American consumer is hurting in the face of a burst housing bubble, financial market meltdown and rising unemployment.
But “the worst is yet to come,” according to Howard Davidowitz, chairman of Davidowitz & Associates, who
believes American’s standard of living is undergoing a “permanent change” – and not for the better as a result of:
- An $8 trillion negative wealth effect from declining home values.
- A $10 trillion negative wealth effect from weakened capital markets.
- A $14 trillion consumer debt load amid “exploding unemployment”, leading to “exploding bankruptcies.”
“The average American used to be able to borrow to buy a home, send their kids to a good school [and] buy a car,” Davidowitz says. “A lot of that is gone.”
No doubt that the end of Americans spending more than you save is a good thing, but since our economy is fueled by deficit spending, both private and public, I doubt our personal economic outlooks are going to get much rosier anytime soon. Especially since this “new era of responsibility” will probably decimate the retail sector.