Record drop in American's net worth... largest drop on record

[Liberal_in_LA]

http://money.cnn.com/2008/12/11/news/economy/flow_of_funds/index.htm

Americans' debt shrinks - 1st time ever
Household debt falls by 0.8% as Americans' net worth falls by largest amount on record on declining home and stock prices.

By David Goldman, CNNMoney.com staff writer
Last Updated: December 11, 2008: 1:56 PM ET

NEW YORK (CNNMoney.com) -- In a sign that Americans' spending habits are shifting, their household debt fell for the first time ever, as their net worth declined by the largest amount on record based on data going back to 1951.

[Selatius]

1. Could it be that common sense has returned to American spending habits?

You cannot sustain an economy by doing what this guy said:

"Throughout the housing bubble, consumers had a savings rate of zero, relying on the rising price of their homes. Now they're saving money for the future instead of spending it."

If you keep doing that, you will simply end up in a nation hollowed out of wealth, and out of that misery, a small few will benefit.

[SoCalDem]

3. common sense, regained too late, is of little comfort

For the person who is drowning in credit card/house/car/student loan debt can get all the "common sense" they want, but they will still OWE all that debt...debt that a lifetime may not be enough time to pay off:(

[SoCalDem]

2. The difference?

In 1951, the "average" person OWED very few borrowed dollars.. they may have had a "house note", on which they may have paid $100-$200 a month...they may have owed $40-70 a month for a car (if that much)..and they probably saved regualrly..

It's unrealistic to measure today against 1951.. Back then a single income supported a whole family....a high school diploma carried people into the middle class..people who dropped out of school could get a good union job and easily support a family..people did not go bankrupt if the needed surgery..

[ColbertWatcher]

5. True it may not be "fair" to compare the 1950s with now, but ...

... all your comparisons point to bigger problems than simply the value of the dollar.

Maybe we're in the middle of an "American Dream bubble?" Just like we had the tech bubble and the housing bubble, maybe what we're seeing now is the failure of our economy due to the creation of imaginary markets pumping millions of dollars into salaries for sociopaths while simultaneously devaluing real work?

Just sayin'.

[Tierra_y_Libertad]

4. It's indicative of a downward, uncontrolled, spiral.

People are "saving" because they can't afford to spend or can't get loans. Which means that other people, the people who produce the stuff they can't buy, will be laid off. Which means that they won't be spending, which means that more that more people will be laid off. Or, employers will cut wages, which means that those people won't be buying...etc, etc, etc.

It's getting ugly, and we haven't even approached the worst of it.