The Reduction of Wealth
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According to the Washington Post, the Federal Reserve released an important update this week on the state of American households that puts numbers in a grim light. The median net worth of families decreased 39% from 2007-2010. The value of a family’s assets, such as cars, homes, and stocks minus debt, decreased from $126,400 in 2007 to $77,300 in 2010. In other words, all the gains experienced in the nineties in family wealth were lost and family finances are in roughly the same state as they were in 1992.
The decline in real estate values is a major component to blame with a decrease of 42% in the median value of American’s stake in their homes.
Hardest hit are the low and middle class families, with only roughly half of middle-class Americans remaining on the same economic rung during the downturn. While the median family level of debt was unchanged, median family income fell 8%. Family financial progress, retirement and homeownership have all been altered by the economic downturn.
In summation, the Fed report paints a bleak picture for American families. Wealth has plummeted, jobs have been lost, and how has Washington answered families’ concerns? Americans are frustrated withWashington’s inability to work together to fix problems. In our recent poll results, two-thirds of voters said their family budget is negatively impacted by the state of the U.S. economy. This has further ramifications on a family’s choice to take vacations and what they can afford at the grocery store. With the well being of American families in decline, it is time for Washington to take responsibility for the nation’s economy.