Surprise! Surprise! America is actually getting poorer

I found an article written by Left-wing blogger Angry Bear about the state of the US economy. While I was happy to concede to others the fact that the US is a very rich nation that nevertheless needed to direct resources to help the poor, I was never aware of any study that shows that the nation is actually getting poorer.

Angry Bear uses something called The Kudlow-Malpass-Tamny definition of savings. I searched for a link for this but couldn't find one that seemed reputable (feel free to find one for me).

I'll just simply copy and paste from the Angry Bear article:

Since I have been on a bit of a tirade per this issue as to whether real wealth has been rapidly increasing, let me recommend a graph from Michael Mandel who writes:

I like to keep track of what I call "real net household wealth". That is, household net worth, subtracting out federal government debt, and adjusting for inflation. In effect, this measure assumes that households will have to eventually pay back all of the debt, and it accounts for debt owned to foreigners as well. And guess what? This measure hit a new high of $45.3 trillion in second quarter, up 7% over a year earlier, and significantly higher than the boom peak of $44.4 trillion.

This 2% increase since the end of 1999 should be compared to the nearly 5.5% increase in population. In other words, real per capita wealth is still below where it was 5.5 years ago.

It's that last sentence that slays me - in the end, although America is "richer" in terms of numbers on a page, if you divide it by population, the numbers begin to drop.

Amazing - America is getting poorer. No wonder poverty rates have increased since 2000 while, at the same time, unemployment has been relatively low and the economy has grown at a moderate pace.

Check out the Wikipedia article on US poverty rates. There is a graph half-way down the page that shows the growth in poverty since 2000.

From the Osostrian School Department