USA - net worth??

Our Canadian readers may be happy to know that they are richer than Americans, measuring by median wealth.

Credit Suisse’s Global Wealth Report  found that in 2011, Canada had a median household wealth of $89,014 to $52,752 for the United States. Not only does Canada beat the United States on median net worth, just about every developed country save Sweden and Denmark does. The UK, Japan, Italy and Australia more than double the U.S. Median.! Yes, even Italy! (See The Washington Post, July 18, 2012).

I looked again at Italy's net worth. Remember, Italy is facing national bankruptcy, yet the average Italian has a net worth three times as USA citizens. In fact, the average Spaniard has a higher net worth than USA citizens. Apparently, buying on credit for the last six decades didn’t actually make us richer. Who da thunk it?

The top ten countries from top down: Australia, Italy, Japan, UK, Switzerland, Ireland, France, Canada, Norway, Finland. The USA was “seventeenth.”

Reality check: These numbers do not record assets only! They record assets MINUS liabilities (what is owed to someone).

Reality check: One of the perks of getting older is that a lot of history is remembered—but not always pleasing. But going back to the post WW2 years is easy. This country entered the 1950s as a nation of savers, but the moneychangers set immediately to work turning us into a nation of consumers addicted to revolving credit, car loans, and big mortgages.

I watched my “silent generation” parents go through the 1930s and 1940s, moving “up” from one rental to another! I remember the several days “bargaining” my Dad did with the new Willys dealer, finally getting his first, brand new car for $700! Mom and Dad saw a beautiful home just right for a growing family--$3500. But they could not get the cash for 20% down. But we enjoyed the one we had--the six of us in a two-story with three bedrooms and a bath, plus plenty of room for a big garden! Yep, we had revolving, high-interest charge card issued by department stores who were the main charge card issuers at that time. Visa and Mastercard had not yet been born.

But then the 50s came and it seems now that we were living in a speeded-up movie! Wow! Soon subdivisions where springing up, bought with FHA or VA loans (FHA!! VA NO MONEY DOWN!!! $60 CLOSING COSTS!! shrieked the sign at the entry to the subdivisions). Then the magic of the charge cards newly available to young marrieds. People wasted no time going out and filling their houses with all the new small appliances and picnic sets and hi-fi sets and other consumer fads of the era. It was your DUTY to consume. It was thought at that time that the affluence of the era was permanent and that there would forever be such a superfluity of consumer goods. A real epidemic of infectious greed!

Every social disease and financial problem of our day has its roots in the Post WW2 era. The 90s were only the 50s and 60s on steroids. You can call it the “high” if you want, but it is always at the peak that the problems take root. That was when we made it our religion to borrow our way to bliss. That was when we promoted, with government force and taxpayers money, the pattern of development, suburban sprawl, that makes us the most copious consumers of fossil fuels.

But no one foresaw (or did they?) our awakening from the phantom dream that the government should make sure that everyone owns his/her own home! The dream of giving a home to everyone who either could breathe or had a pulse! Sub-prime mortgages, sub-sub-prime mortgages (110% mortgages!) without collateral. Then bundling all these white-hot mortgages into securities and then sold on the world market—mortgages that were made to fail. But the originators got their commissions and no longer held the mortgage paper. What a deal!

They tell me that Italians generally “own” their homes, mortgage-free. That is why their net worth is more than the average USA citizen. That is why so many USA citizens have seen their net worth sink so fast in the last five years. That is why so many USA citizens face retirement without the net worth of a home they once could sell for a comfortable retirement. That is why USA citizens have never been here before!