In his “Ahead of the Tape” column in WSJ 3/11/09, Mark Gongloff reports that 3rd quarter household debt recorded its first decline since recordkeeping began in 1952. Even with the decline, household debt was a whopping 96% of GDP. In 1998, it was 66% of GDP. The Fed releases 4th quarter data on 3/12/09.
Why were many of us taking on more debt? Easy credit is one answer. The other is less income. The median income has been decreasing, not increasing. The Grandfather Economic Report presents several pictorial and informative analyses of economic trends for families by a NASA physicist with postgraduate work in business and economics. Milton Friedman liked it.
In an op-ed in WSJ 3/12/09, Daniel Henninger reviews a “Top 1% earners” chart that shows the net that the top 1% of earners took home over the past decades. It is a part of Obama’s recently released budget. Henninger notes some of the flaws of this chart, it’s primary flaw being that it is a tool of “progressives.” Whatever its flaws, this summary of median income data shows that the trend is real. Henninger says that the “primary goal [of the Obama budget] is a massive re-flowing of ‘wealth’ from the top toward the bottom.” Henninger denies any “reflowing” of wealth from the bottom to the top in the past few decades.
There is no set of facts that can sway the path of a herd ideology, whether it be on the right or left.