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Is The American Dream Forever Changed?

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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.

Thoughts?