Shocking Charts And Statistics That Prove That America Is No Longer A Wealthy Nation

How do you decide whether you are wealthy or not? 

Do you determine that by how much money you spend at the stores?  Of course not.  You can tell if you are wealthy or not by comparing your assets (the money in your bank account, equity in your home, etc.) to your liabilities (your mortgage, credit card debt, student loan debt, etc.).  Well, a lot of Americans seem to believe that just because a lot of money is circulating in our economy that it must mean that we are a wealthy nation. 


But that is simply not true.  To tell whether or not America is a wealthy nation, you need to look at the balance sheet numbers.  And when you look at the balance sheet numbers, a very sobering story emerges.  Over the past three decades, government debt, business debt and household debt have absolutely exploded, but our assets have not.  That means that we are getting poorer as a nation.  Hopefully the shocking charts and statistics in this article will help a lot of Americans to wake up.  Yes, we once were the wealthiest nation on earth, but today America is no longer a wealthy nation.

Household Wealth

We live during a time when U.S. households are becoming poorer.  This week the Federal Reserve announced that the total net worth of U.S. households declined by 4.1 percent in the 3rd quarter of 2011 alone.

That is a staggering decline.  The total net worth of U.S. households plummeted by $2.2 trillion during those three months.  When you break that down, it comes to approximately $7,800 for every single U.S. citizen.

But this is not the first time we have seen a huge decline in U.S. household wealth in recent years.

A recent article posted on CNN detailed the stunning drop in U.S. household wealth that we saw from 2007 to 2009....

Household wealth plunged $16.3 trillion in the two years from early 2007 to the first quarter of 2009, and has slowly been climbing since then. But with the drop in the third quarter of this year, households find their net worth still $9.4 trillion, or 14%, below the high they hit in early 2007, before the bursting of the housing bubble.

So right now the total net worth of U.S. households is $9.4 trillion below what it was back in 2007.

That certainly is not good news.

But not only is the total net worth of U.S. households going down, our incomes are going down as well.

Since December 2007, median household income in the United States has declined by a total of 6.8% once you account for inflation.

Not that incomes were rising very quickly prior to that time either.

Between 1979 and 2007, income growth for the bottom 90 percent of all U.S. income earners was only about 5 percent for that entire time period.

Meanwhile, household debt was absolutely skyrocketing.  Take a look at the following chart which shows what total U.S. household debt has done over the last three decades....

So income growth has been pretty much flat over the past three decades but household debt has been rising at an exponential pace for most of that time.

Yes, there has been a little bit of deleveraging during this economic downturn, but there are now signs that the deleveraging is rapidly coming to an end.

According to a recent CNN article, credit card use in the United States is experiencing a major upswing once again....

Purchases made with credit cards rose 8.2% in the first quarter of 2011, 9% in the second quarter and 10.6% in the third quarter, according to First Data.

That is not good news.

The truth is that U.S. households owe way, way too much money already.  According to a recent study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.

We are up to our eyeballs in debt, and our incomes are not keeping up.

In addition, we have seen massive amounts of home equity wiped out in recent years.
An unusual thing has happened during this economic downturn.  For the first time in U.S. history, the banks have more equity in our homes than we do.  If you do not believe this, just check out this chart.

The truth is that the American people are not becoming wealthier.  They are becoming poorer.

And a shocking number of Americans are falling into poverty.  In 2010, 2.6 million more Americans fell into poverty, which set a new all-time record for a single year.

But this is not a new thing.  This is a trend that we have seen building for many years.  Back in the year 2000, 11.3% of all Americans were living in poverty.  Today, 15.1% of all Americans are living in poverty.

So obviously U.S. households are not doing well.

But what about the government?

Government Debt

The U.S. national debt is completely and totally out of control.  Right now it is sitting at $15,046,397,725,405.16.  That means that it is nearly 15 times higher than it was just 30 years ago.  Just check out this almost unbelievable chart....

So is our ability to pay these debts 15 times greater than it was back then?
Of course not.

Our liabilities are exploding at an out of control rate but our assets are not.
Whether you are a running a family or running a government, that is a recipe for financial disaster.

The U.S. government has been running budget deficits of over a trillion dollars for several years now, and there is no sign that these trillion dollar deficits are going to stop any time soon.

So how much money is a trillion dollars? Finish Reading @Source: TheEconCollapse