Recession sets family wealth back nearly 20 years
Image courtesy of Flickr user 401K
(AP) WASHINGTON - The Great Recession shrank Americans' wealth so much that in 2010 median family net worth was no more than it had been in 1992 after adjusting for inflation, the Federal Reserve reported Monday.
Median net worth declined from $126,400 in 2007 to $77,300 in 2010, a Fed survey of family finances found. The median marks the point where half had more and half had less. The recession officially began in December 2007 and ended in June 2009.
Net worth is the value of assets like homes, bank accounts and stocks, minus debts like mortgages and credit cards.
The Fed's findings are in its latest Survey of Consumer Finances, a comprehensive review of household finances that the Fed has done every three years dating to 1989.
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The Fed's survey of consumer finances contains information only through 2010. A separate survey the Fed released last week showed that total family net worth climbed 4.7 percent in the January-March quarter to $62.9 trillion, about 28 percent above its recession low. The increase was fueled by stock market gains.
Those gains put net worth about 5 percent below its pre-recession peak of $66 trillion. But since the first quarter ended, lower stock prices have eroded some household wealth.
The Fed's more detailed Survey of Consumer Finances is done every three years. The latest survey showed Monday that much of the drop in net worth from 2007 to 2010 reflected the collapse of the housing market, which drove down home values.
Among families that owned homes, the Fed survey found that their median home equity declined from $95,300 in 2007 to $55,000 in 2010, a drop of 42.3 percent. Home equity is the home's value minus how much is owed on the mortgage.
The Fed survey found that median incomes fell from $49,600 in 2007 to $45,800 in 2010, a drop of 7.7 percent.
The Fed survey found that the proportion of families carrying a credit card balance fell to 39.4 percent in 2010. That was down 6.7 percentage points from 2007. Among families with a credit card balance, the median balance fell from $3,100 in 2007 to $2,600 in 2010, a drop of 16.1 percent.
The proportion of families with debt that had a debt payment that was late by 60 or more days during 2010 rose to 10.8 percent, up from 7.1 percent in 2007.
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AND ROMNEY'S GOING TO USE THIS TO REPORT TO CRITICIZE OBAMA? THIS IS WHY I HATE THE REPUBLICAN PARTY WITH ALL OF MY HEART AND SOUL.
It takes a lot to tank the economy, explode the deficit, and roll back economic progress by 20 years, but our elected officials in Washington, DC have accomplished it.
Is there anyone else who thinks that, in and of itself - no matter the state of our economy, is completely broken?
Yes, according to Economics 101, the bush/cheney Great Recession of 2007-09, ended in mid-2009, as economic growth turned positive and job creation began again, after we lost 9 million jobs.
The "mess" we're in today, is the continuation of the GOP's "supply side economic insanity" that has been with us for 11 years, and during that past decade, we've seen marginal economic growth (average economic growth during bushworld was a mere 1.9%) terrible job creation compared to the past 3 decades, and the steady decline of the American middle class, seeing their household incomes drop considerably along with their family wealth.
The true JOB CREATORS are the middle class consumers in our consumer-based economy, and if the middle class does well -- everyone does well! We cannot afford willard womney's proposal of "supply side economic insanity" on STEROIDS to become a reality or we're doomed!
Ummm..."Clownie-fun-recovery-cleanup-time"(?)
Yes, it's simple to see when the small gains the middle class made under Clinton ended -- the minute george wmd bush was selected by SCOTUS -- and over the past decade, we've seen marginal economic growth, very poor job creation and only the wealthiest Americans seeing their incomes soar.
The true JOB CREATORS in our consumer-based economy are the middle class consumers, and their household incomes have dropped from $53K down to $48K, leaving them far less disposable income today than in the 1990's.
If the middle class does well, everyone does well, since even the wealthy business owners will see higher profits!
Face facts mr. republican voter, willard romney said it best -- "President Obama did not cause the Great Recession."
So it's only natural that he can point out to the disillusioned, the REAL causes and all the GREEDY players that shoulder the blame, and believe me, there's plenty of blame to go around.
If you actually 'think' that even more tax cuts for the wealthiest Americans like romney will ever help grow our economy after watching 11 years of the bush tax cuts just grow our deficits and debt, then you are sadly mistaken. American corporations have seen record profits the past 2 years, the top 1% has seen their incomes soar, and yet the middle class continues to evaporate even faster.
Sorry, but more GOP "supply side economic insanity" will only make the wealthy even wealthier, and average family wealth will plummet even more than it has over the past 30 years!
Bush had 9-11, Katrina, Iraq. Pre-Bush there was no TSA or Homeland security, he warned the Democratic congress in '01 & '02 to address the obvious housing collapse, they refused.
Now, obama has been responsible for increasing out debt MORE than all the presidents COMBINED & has maintained 40 consecutive months of 8+% unemployment, the 1st time in history, the slowest GDP growth since WWII and he still blames everybody & everything else...because he has no clue, or this is his intention.
"We are continuing this policy in bleeding America to the point of bankruptcy."
Osama Bin Laden - November 2004
Affordable Housing Act in '94
Affordable Housing Act in '94
which was a major component of this dire economy."
You fox/rush parrots just crack me up, and can only blame the best 'republican' president we've had in the past 50 years!
Sure, Clinton was partly to blame for the 2008 financial-sector implosion by signing the 1999 GOP wet dream of financial deregulation, but give us a break about the "housing act of 1994."
Must be your republican 'selective memory,' forgetting all about what really drove the housing bubble -- the GOP's 2003 American Dream Downpayment Act subsidizing low-income home buyers at the same exact time that the Fed lowered interest rates to historical lows.
You really need to stop playing partisan politics and do something about your terrible 'selective memory' giving the GOP a free pass!