Authored by David Stockman via the Brownstone Institute,
Here's a graph the Keynesians, statists, and Wall Street gamblers - yes, we repeat ourselves - would prefer not to explain. At the same time, it also explains why socialism at this late date in history - and after all its abysmal failures the world over - is having some kind of dubious second coming in America.
During the last three decades the national savings rate (red line) has essentially collapsed, having fallen from 6.3% of GDP in 1997 to 0.5% of GDP in 2025. Between the same two dates, however, the net worth of US households (blue line) has soared from 4.6X personal income to 6.5X personal income.
In economist jargon, the question would recur as follows: How in the world over a three-decade period did the stock of wealth soar when the flows of savings virtually evaporated?
Or in plain English, how did so many Americans get so damn rich while living high on the hog? And we do mean wealthy: According to the Fed's Flow of Funds data, household net worth erupted from $32 trillion in 1997 to $169 trillion at present. These figures amount to an average of $320,000 per household in 1997, which grew to an average of $1.250 million per household 28 years later.
Needless to say, some substantial part of that gain is reflective of inflation. But even in constant 2025 dollars, average net worth per household has virtually doubled from about $630,000 to the aforementioned $1.250 milli
