Skip to main content

Money Anxiety Index Founder: Americans Must Start Spending Now

Phil Hall
Sep 26, 2014

A leading expert on behavioral finance has a message for Americans: If you want to stabilize the housing market and strengthen the economy, take your money out of your bank accounts and start spending and investing. Dr. Dan Geller, developer of the Money Anxiety Index and a prominent commentator on economic issues, stated that the U.S. economy only be able to brush away the residue of the 2008 crash once bank accounts held by consumers goes below 50 percent of the Gross Domestic Product (GDP). Dr. Geller noted that the amount of money consumers held in bank accounts was consistently in the 39 percent to 47 percent range of GDP for two decades before the beginning of the last recession, when it climbed up to 57 percent, which represents about $2 trillion in additional savings since the recession began. Dr. Geller stressed that the new exodus of money out of bank accounts will help to reanimate the residential real estate markets. “It will definitely have a positive and substantial impact on housing,” he stated. “This high tide will lift all boats – it will enable people to put money into down payments and remodeling and everything related to housing.” The problem, Dr. Geller acknowledged, is easing consumer apprehension regarding the state of the economy. He stated that Washington, D.C. can only go so far in soothing consumer anxiety on this issue. “As far as government goes, it should offer more assurances that the economy is on the right track,” he said. “But the government cannot spend us out of this situation–its impact on the GDP is minimal. Only consumers can give us that jolt and get us out of this sluggish economy. And when this level of money anxiety declines further, then it will encourage everyone who wants to buy a house to participate.” Dr. Geller added that prior to the last recession, the Money Anxiety Index stood at 58.6, compared to 71.6 today. The Money Anxiety Index measures consumers' level of financial worry and stress, and has fluctuated from a high of 135.3 during the recession of the early 1980s, to a low of 38.7 in the mid 1960s.
Fifth Third Bank Expands Down Payment Assistance Program

The program will provide up to $3,600 towards a down payment for families with low to moderate income.

Industry News
Jun 09, 2021
Filo Mortgage Launches Low-Rate Guarantee

National mortgage lender Filo Mortgage is offering to beat competitors' pricing by $1,000 with its Low-Rate Guarantee.

Industry News
Jun 08, 2021
FAU Index Shows Where Consumers Should Buy Or Rent

Consumers are better off renting in cities like Dallas, Texas

Industry News
Jun 07, 2021
Verus Title Inc. Expands Into Dallas-Fort Worth Texas

Verus plans to take advantage of the Dallas-Fort Worth market before expanding throughout the state.

Community
Jun 07, 2021
Freddie Mac Multifamily Extends Forbearance Deadline To September

Freddie Mac Multifamily extended the deadline for requesting a new COVID-19 forbearance agreement for its Multifamily loans to September 30, 2021.

Industry News
Jun 04, 2021
Fannie Mae Launches 'Your Own Story' To Educate Future Homebuyers

Fannie Mae is seeking to help demystify the homebuying process for future homeowners with “Your Own Story.” A new campaign to educate future homebuyers on the entire process.

Industry News
Jun 04, 2021