The recent recession wiped out nearly two decades of Americans’ wealth, according to government data released Monday, with middle-class families bearing the brunt of the decline.
The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were back in 1992.
The data represent one of the most detailed looks to date of how the economic downturn altered the landscape of family finance. Over a span of three years, Americans watched progress that took almost a generation to accumulate evaporate. The promise of retirement built on the inevitable rise of the stock market proved illusory for most. Homeownership, once heralded as a pathway to wealth, became an albatross.
[i]The recent recession wiped out nearly two decades of Americans’ wealth, according to government data released Monday[/i]
They must not have received the memo from last week: “the private sector is doing just fine……..”
Our wealth has dropped more than that. The CPI, which is a flawed inflation indicator because it fails to include changes in the cost of energy and food, shows an 11% change from 2007 to 2012. As a result, not only did American wealth decrease because of reductions in home values and retirement savings amounts, but the purchasing power of the monies remaining also dropped by 11%.
No. 1, You beat me to it. I was thinking that as I read the article.
I’ll hand it to you, Warren, at least you included ellipses, because the President did go on to clarify that remark.
What he should have said is, “the rich are doing fine,” which this article bears out.
Don’t get me wrong – there are tens of thousands of very real victims in this – but the assumption made in the article is that our wealth in 2007 was real, that it wasn’t inflated by unsustainable and specious valuations of property and other investments. Interesting that the final result put us at around the same net worth as we had in 1992 – which, in my unscientific recollection, is nearly when the markets started going a bit bonkers in terms of valuations and returns. Didn’t the DOW first break 10,000 in the mid-90’s…?
HT, montanan. I recall watching CNBC around 1992 wondering who was going to pay the piper. I figured inflation would wipe out the paper gains in a year or three. Instead, inflation was papered over (literally as well as figuratively) and we got a crash 15 years later. – Actually a series of crashes leading up to the meltdown of the financial sector.
Waiting for the next adjustment as the double dip hits and middle class folks realize how badly they have fallen regarding jobs and wages and really panic.