PrudentBear.com - The One-Stop Shop for the Bear Case: "As of Q1 2006, the gap between household sector expenditure and income widened $100b to a nearly $700b deficit at an annualized rate. This deterioration in the household financial balance has been going on since 1997. Since early 2005, the rate of decay has accelerated noticeably. The US household sector financial balance is plunging.
Oddly, while many Wall Street economists decry government spending in excess of income (tax revenues), they turn a blind eye toward private sector deficit spending dynamics. Contemporary economists are trained to view household spending decisions as the aggregation of millions of individuals engaging in intertemporal utility calculations, which by definition must produce rational consumption paths over time. While it is said that ignorance is bliss, such a dramatic deepening of US household deficit spending as that displayed below suggests this is at best a naïve view on the part of contemporary economists, if not a patently absurd one."
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