US Household Worth Falls For The First Time Since 2002

The Good news just keeps on coming.

U.S. household wealth fell in the fourth quarter for the first time in five years and borrowing slowed as home values plunged and lenders restricted credit, Federal Reserve figures show.

Net worth for households decreased by $532.9 billion from the previous three months, the first decline since the third quarter of 2002, according to the Fed's quarterly Flow of Funds report today. Housing-related net worth dropped by $176.4 billion.

Lower home and stock prices and reduced access to loans are prompting Americans to spend less and are driving up foreclosures. A slowdown in consumer spending, which accounts for two-thirds of the economy, threatens to push the U.S. into a recession.

How can the American consumer not cut back on spending? We are in a period of rising inflation, lower home values, job insecurity and a national debt that is the largest in the world. It amazes me how they still say we are the richest nation on earth. Its like that beautiful girl in high school who has let herself go but can't seem to see it for herself. It is time to face reality and prepare for a future not as an empire but as a benevolent nation whose goal is to better the world for all its citizens.