A sluggish economic
recovery sees some pundits suggesting the problem revolves around
the notion that the richest Americans and companies don�t have
enough money to invest or that �regulations� or �uncertainty� is
discouraging investment.
No. According to recent
data, the problem is that the primary customers in this economy,
average American households, are losing ground fast. When a
company�s customers are suffering, the company will suffer � no
matter how much cash it has available to invest.
American consumers spend
most of their money in at home. And that money becomes revenue for
U.S. companies. So when the average consumer�s spending is weak, the
whole economy is weak. Which is exactly the situation we�re in now.
A new study by Sentier
Research provides the evidence. In the year 2000, after adjusting
for inflation, the median household in the U.S. earned about $55,000
per year. Now, twelve years later, the median has fallen to $51,000.
The two age-groups that
have been hit the worst during this period are households led by
those in the 55-64 age group and those in the 25-34 age group. The
incomes of the near-retirees have fallen by nearly 10% in just the
past three years. Thus, the bottom-line is that the economic
recovery is weak and sluggish because consumers are losing their
spending power.