Nervous Retirees Are Too Scared to Spend

The U.S. economic recovery, the longest in recorded history, has increased Americans’ wealth by $52 trillion, according to the Federal Reserve. Wall Street is bursting with new money. U.S. stocks trade near record highs. Private equity firms search high and low for places to deploy more than $1 trillion of investor cash. Banks, enjoying a glut of deposits, pay savers interest rates that are minuscule from an historic perspective.

All these riches should generate lots of economic activity. The well-off could be buying themselves little luxuries or doing something more productive, like starting new businesses or expanding old ones. Or they could donate more to charity. At the very least, the extra financial cushion should make Americans feel more secure.