Flow of Funds Washes Out Pessimists

This column was originally published on RealMoney on Dec. 8 at 3:11 p.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

The U.S. reported third-quarter flow of funds Dec. 7. There are several points in the report that illustrate larger developments, but the key takeaway is that contrary to the take from the doom-and-gloom camp (one member, the economics editor of the Financial Times, sees the U.S. as being "comfortably on the road to ruin"), American prosperity continues unabated.

First, the flow of funds report shows that household net wealth in the U.S. rose by about $800 billion in the third quarter. To put this in perspective, it's roughly Canada's GDP; that is, U.S. household net worth increased by about the value of all the goods and services the Canadian economy produces in a year. ...