"The number of U.S. households with a net worth of $1 million or more rose 21% in 2004, according to a survey released yesterday by Spectrem Group, a wealth-research firm in Chicago," continues the article.

"There now are 7.5 million millionaire households in the U.S., breaking the record set in 1999 of 7.1 million. The study excluded the value of primary residences, but included second homes and other real estate.

"A separate study, also released yesterday, by Boston Consulting Group found that the U.S. continues to lead the world in creating new millionaires. The number of households in the U.S. with liquid assets of $20 million or more is increasing by 3,000 households a year."

Once again, we are confronted by a contradiction, a paradox, or a damned lie.

Overall, the American economy is in decline. It "grows." But its growing is progress on the downhill slope. It is like a man on his deathbed advancing to the grave. Every day brings it closer – at a rate of about $2 billion per day. Earnings are stagnant. People spend more than they earn...while their biggest living expense – the cost of housing – soars.

How could it be that they get richer at the same time?

We have come to a curious conclusion. That once the zeitgeist...the ruling spirit...of these united states inclined towards empire, all its institutions, its constitution, its news media, its philosophies and folklore, its theories and popular hysterias, and even its statistics had to bend. After 1989, the United States was clearly the master of the world. If it was master of the world it must be superior to it. Everything about it must be superior; its intellectuals and public chatterers just had to explain why.

Why is the U.S. economy so superior? Because it is a paragon of "technological dynamism, openness to trade, and flexibility," volunteered David H. Levey and Stuart S. Brown, writing in Foreign Affairs magazine. "Would-be Cassandras have been predicting the imminent downfall of the American imperium ever since its inception," the pair begins. But don't worry, "U.S. power is firmly grounded on economic superiority and financial stability that will not end soon."

How they know what will be reported in tomorrow's newspapers they do not bother to explain. Nor do they explain how being open to trade helps a country that has given itself a competitive disadvantage, or why, if the U.S. economy is so dynamic and flexible, it cannot afford to raise wages...or pay for what it consumes on a current basis.

But when the "facts" seem to contradict the imperial theory, the "facts" are bent. Here, misters Levey and Brown go to work with crowbars:

"Capital gains on equities, 401(k) plans, and home values are excluded from measurements of personal saving; when they are added, total U.S. domestic saving is around 20 percent of GDP – about the same rate as in other developed economies. The national account also excludes 'intangible' investment: spending on knowledge-creating activities such as on-the-job training, new-product development and testing, design and blueprint experimentation, and managerial time spent on workplace organization."

Intangible investment? Why didn't we think of that sooner! The trouble with the concept is that it produces intangible products, intangible profits, and intangible wages. Maybe the employees will get to enjoy an intangible sandwich someday.

The only way Americans continue living in the style to which they've become accustomed is by mortgaging the inflated value of their own tangible homes...and running public sector deficits – both are forms of stealing from the future. Only an old man with nothing more to prove would say so, but the U.S. economy in 2005 has become what Warren Buffett calls "Squanderville." Americans, he says, are becoming "sharecroppers," in an "ownership" society.

But whence cometh these 7.5 million millionaires?

They blow in on the same gust of deceit that bends the rest of America. Even though primary residences were not included in the calculations directly, the whoosh of debt lifts up all assets. Owners' equity sustains borrowing...and other assets, including second homes and property investments – rise too. And it reduces the need to sell other assets – since equity can be taken out and spent almost as easily as you can order a pizza. This boosts up asset prices generally and puts millions of people with rather ordinary finances into the millionaire category.

It is all a conceit and a fraud. But at least people are enjoying it.