Supposedly, the Fed is doing “all it can” to “get the economy moving.”
But because all political contrivances can do is move wealth around, rather than produce real wealth, any “good” done by the Federal Reserve must come from somewhere else.
Thus, the St. Louis Fed reports:
The average young family—which we define as a single- or multi-person family unit headed by someone under 40—has recovered only about one-third of the wealth it lost during the financial crisis and recession. The average wealth of middle-aged families (ages 40 to 61) and older families (ages 62 or older) has recovered to about its precrisis level.
The main reason young families’ balance-sheet recovery lags is the recent housing crash and its lingering effects. The homeownership rate among younger families has plunged, reflecting both the loss of many homes through foreclosure or other distressed sales and delayed entry into homeownership among newly formed households. The house-price gains that have helped mainly older families to rebuild homeowners’ equity have been overshadowed among younger families by the ongoing retreat from homeownership.
So the people most impoverished by this so-called “recovery” are the ones who are most likely to live to see a debt crisis brought about by the reckless spending. Yet these are the people that the Affordable Care Act expects to subsidize the healthcare of their elders.
This younger generation is our future. The fact that our economic masters have put them into a position to want to delay forming families does not bode well. By not having children and not building families, the present economic malaise promises to leave a cascading wound in the economy as time goes by.
Bloomberg news puts a face on the statistics:
The damage inflicted on U.S. households by the collapse of the housing market and recession wasn’t evenly distributed. Just ask Jason and Jessica Alinen.
The couple, who live near Seattle, declared bankruptcy in 2011 when the value of the house they then owned plunged to less than $200,000 from the $349,000 they paid for it four years earlier, just as the economic slump was about to start. Jason even stopped getting haircuts to save money.
“We thought we’d have a white picket fence, two kids, two dogs, and we’d have $100,000 in equity,” said Jason, 33, who does have two children. “It’s just really frustrating.”
What makes Jason and Jessica’s story better than most is that they went ahead and had children.
(Hat tip: Mish)