Bottom 80% of US Households Persistently Dissaves-Spending More Than Income 2 years ago
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embersbreaking
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The wealth affect literature is skimpy and not very good, and heck, the Keynesian consumption function that pretty much every model uses doesn’t even have a wealth term.
Interesting, I just pulled this the other day. Average (mean) bottom-20 household has 18 K in checking deposit assets and 200 K in total assets. even while that quintile’s income caps at $32K. America is a very rich country…
Might read the title of that table again.
If you’re looking at the consumer expenditure survey, it’s tally of household expenditures this is about 40% of BEA personal consumption expenditures. And it’s surveyed income measures are also dicey. It’s excellent for knowing which income quintiles do which shares of consumption, though.
Income tax is a non-issue for the issues covered in this post, except that they are one of multiple things that draw down household assets.
Good point. Much of the dissaving is by the bottom 20%, which probably consists of many retirees with low incomes who are spending down their accumulated assets.
No. It’s the bottom 80% of income earners. The post seems to make that perfectly clear, and explains why that measure is used.
@mruts: "but then inflation will just go up a similar amount"
That is a faith-based belief.
"70s and early 80s when the number of jobs was shrinking"
That's very interesting. Got any cites for that? Would like to explore. Thx.
These companies do make billions and billions in profit.
Have you looked into Amazon's dividend distributions since inception?