The majority of Americans may be financially and economically illiterate. Many have nothing, and likely will never have anything. Over 65% of American adults have a net worth under $100,000. In Australia, over 65% of all adults have a net worth exceeding $100,000.
The recent 2013 Consumer Financial Literacy Survey shows the financial literacy trends are getting worse:
In fact, as in 2011 and 2012, many adults (40% 2013, 42% 2012, 41% 2011) now give themselves a grade of C, D, or F on their knowledge of personal finance, marking a statistically significant change from 2010, when as many as nearly 2 in 3 adults (65%) gave themselves an A or B.
Yet when we look at data, it seems like wealth in America is growing, and recovered or recovering from the Great Recession.
The per capita wealth of the average American is over $220,000 (blue line in below graph). This is true capital building, and refutes that the average American is not a good wealth builder.
This graph above shows average net worth, but gives no understanding of median wealth (the wealth of the 50th percentile American).
Few people are natural born wealth builders. Many watch their parents build or not build wealth. The median American's net worth is not good - in fact it is terrible when you compare it to other countries. The following table has been cut-and-pasted from the 2012 Credit Suisse Global Wealth Databook to give a relevant thumbnail comparison between the USA, and is just a small sample of countries in this report.
Pick your reason why the 50th percentile (median) American is so poor - education system, bad parenting, religion, nanny government, lazy sods, suppression by the 1%. Grab any prejudice and believe it - because no one can prove it wrong. The data simply does not exist to prove anything. Even so, this type of data only defines the problem, and not the cause.
But a solution is necessary as the lagging trend shows degrading median wealth (from the few data points that exist). Weakening of the majority of the population weakens the system as a whole.
The modern world is capitalistic from Beijing Financial Street to Wall Street. The first ingredient in capitalism is capital - and the USA is trending towards a situation where capital only resides in the hands of a smaller and smaller minority of the population.
My usual weekly economic summary is in my instablog.