The Lost Decade

Ever since he won the Nobel Prize in Economics, I've been paying more attention to what New York Times columnist Paul Krugman has to say. In this article, entitled "Decade at Bernie's", Krugman lays out some depressing statistics relating to at least one aspect of the current financial crisis: the family debt load. He's writing about American families, but I don't imagine that our Canadian equivalents are too far off that same mark. The sentence that really caught my attention was:

"the net worth of the average American household, adjusted for inflation, is lower now than it was in 2001."

Now, I'm quite sure that Vicki and I don't fall into that category, because we've saved a lot of money and reduced our family debt to zero, since paying off our mortgage in 2001. As such, our net worth is much greater now than it was at the start of the century. However, in one particular regard, we do fit right within the ugly picture that Krugman draws: our RSP is now worth just about exactly the same as it was worth at the start of 2001 (and adjusting for inflation, it's worth quite a bit less). That's 8 years of contributions and growth, all evaporated over the past year. And not one cent of that "lost savings" disappeared because we spent it... it all went away thanks to the 3-card monty hustle known as the stock market.