WASHINGTON - In the economic history of our time, June 6, 2013, ought to occupy a special place.
That's the day the Federal Reserve disclosed that the net worth of American households - the value of what they own minus what they owe - hit $70 trillion, a record that exceeded the previous peak before the 2007-09 financial crisis.
Higher stock prices and a long-awaited housing recovery are slowly restoring Americans' lost wealth.
By all rights, this symbolic crossing ought to improve confidence, prompt consumers to spend more freely, and increase the economy's growth.
Maybe it will.
But don't hold your breath. The "wealth effect" isn't what it used to be.
For those who have forgotten, this refers to households' tendency to spend some part of their increased real estate and stock market wealth and thereby boost the economy.
During the boom years, Americans borrowed lavishly against rapidly appreciating home values. One Federal Reserve study estimated the extra cash at $700 billion annually from 2001 to 2005.
Now psychology has changed. Careless optimism has given way to stubborn cautiousness.
Wealth gains don't translate into similar amounts of higher spending.
The breakdown may explain why the Fed's easy-money policies have, at best, only modestly achieved their ultimate goals: stronger job creation and economic growth.
By buying Treasury bonds and mortgage securities, the Fed hoped to lower interest rates and push up the prices of homes, stocks and other financial assets. The money that investors received from selling their Treasury and mortgage securities would flow into these other markets.
It can be argued that the Fed succeeded, though no one knows what would have happened if its policies had been less aggressive.
In any case, stocks have more than doubled since their 2009 low; and falling mortgage rates, which dropped below 3.5 percent for a 30-year loan, helped revive home sales and prices.
But to realize its growth and unemployment goals, the Fed needed the extra wealth to translate into higher spending. Here's where the process seems to have broken down.
Before the financial crisis, says economist Mark Zandi of Moody's Analytics, an added dollar of housing wealth might produce 8 cents in extra spending; and an extra dollar of stock wealth, 3 cents. The overall effect was about 5 cents per dollar of new wealth, Zandi says.
Now, 2 or 2.5 cents "seems more likely to me."
Why the change?