OT: Americans saw wealth plummet 40 percent from 2007 to 2010, Federal Reserve says

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Down and down into the toilet bowl you go...
Bush really screwed you up as a country, didn't he?
Maybe you'll learn a lesson about rampant military spending and reckless (if not retarded) foreign policy. But probably - you won't.
================================= http://www.washingtonpost.com/business/economy/fed-americans-wealth-dropped-40-percent/2012/06/11/gJQAlIsCVV_story.html
Americans saw wealth plummet 40 percent from 2007 to 2010, Federal Reserve says
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 in 1992.
The data represent one of the most detailed looks at 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.
The findings underscore the depth of the wounds of the financial crisis and how far many families remain from healing. If the recession set Americans back 20 years, economists say, the road forward is sure to be a long one. And so far, the country has seen only a halting recovery.
Its hard to overstate how serious the collapse in the economy was, said Mark Zandi, chief economist for Moodys Analytics. We were in free fall.
The recession caused the greatest upheaval among the middle class. Only roughly half of middle-class Americans remained on the same economic rung during the downturn, the Fed found. Their median net worth the value of assets such as homes, automobiles and stocks minus any debt suffered the biggest drops. By contrast, the wealthiest families median net worth rose slightly.
Americans have tried to rebalance the family budget but have found it difficult to reverse the damage.
The survey showed that fewer families are carrying credit card balances, and those who do have less debt. The median balance dropped 16 percent, from $3,100 in 2007 to $2,600 in 2010. The Fed also found that the percentage of Americans who have no debt rose to a quarter of families.
But that progress was undermined by other factors, leaving the median level of family debt unchanged. The report said more families reported taking out education loans. Nearly 11 percent said they were at least 60 days late paying a bill, up from 7 percent in 2007. And the percentage of families saddled with debts greater than 40 percent of their income stayed the same.
Not only were Americans still facing significant debts, but they were making less money. Median income fell nearly 8 percent, to $45,800, in 2010. The median value of stock-market-based retirement accounts declined 7 percent, to $44,000.
But it was the implosion of the housing market that inflicted much of the pain. The median value of Americans stake in their homes fell by 42 percent between 2007 and 2010, to $55,000, according to the Fed.
The poorest families suffered the biggest loss of wealth from the drop in real estate prices. But middle-class Americans rely on housing for a larger part of their net worth. For some, it accounts for just more than half of their assets. That means every step downward is felt more acutely.
Rakesh Kochhar, associate director of research at the Pew Hispanic Center, calls this phenomenon the reverse wealth effect. As consumers watched the value of their homes rise during the boom, they felt more confident spending money, even if they did not actually cash in on the gains. Now, the moribund housing market has made many Americans wary of spending, even if their losses are just on paper.
According to the Fed survey, that paper wealth or what is officially called unrealized capital gains shrank 11 percentage points, to about a quarter of Americans assets.
The findings track research Kochhar released last year that showed a dramatic drop in household wealth during the recession, particularly among minorities. That study found record-high disparities between whites wealth and that of blacks and Hispanics.
It was turning the clock back quite a bit, Kochhar said.
The Feds survey is conducted every three years. Although there have been some signs that the recovery has picked up housing prices have begun to stabilize and unemployment has fallen Fed economists said those improvements largely do not change the survey results.
Recovery from the so-called Great Recession has also been particularly slow, the report said.
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Home Guy wrote:

http://www.washingtonpost.com/business/economy/fed-americans-wealth-dropped-40-percent/2012/06/11/gJQAlIsCVV_story.html
And 93% of increased income went to the top 1%. Poor dears, they really need a tax cut.
Tax cuts to rich help the job providers. We've been doing virtually nothing but tax cuts for the rich since Reagan. We've tested this theory for decades, and have proven it works. Just look at all the jobs we've created with tax cut for the rich. It's so succesfull, employers can't find anyone to hire.
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In wrote:

Low taxes are necessary but not sufficient for a robust economy.
A rational, predictable regulatory environment is absolutely essential, but absolutely missing.
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snipped-for-privacy@iphouse.com St. Paul, MN

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In

Can you point to exactly which of Clinton's tax increases directly caused the "huge number of jobs" to be created?

Remember, Clinton signed NAFTA and presided over many welfare and business regulation reforms. Today, he'd be considered a moderate Republican.
Is Obama's fast and furious generation of debt going to balance the budget?
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snipped-for-privacy@iphouse.com St. Paul, MN

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Compared to those he cut.. like say.. the cap gains rate?

Most of Clinton's balanced budget occurred during a GOP-controlled Congress and since these are the guys who actually decide what gets spent and when...

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So the surplus under Clinton was due to congress, but the deficit and debt under Obama is due to Obama?
Congress is the big spender here and then.
Remember, it doesn't matter who is president, Congress will always find a way to screw things up.
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Clinton's congress was the opposition. Obama has his pals running the show.

The Senate and Obama are the big spenders. They have no interest in changing a thing.

It certainly *does* matter. You don't think the President has anything to do with regulations?
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wrote:

If Romney gets in, watch the fur fly. He'll add to the deficit even more, or get run out of town on a rail. As to the topic, there was no wealth decline except for those who lost their jobs, and that income. Any decline in home "value" is a mirage, because that "value" was a mirage in the first place.
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Vic

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On Wed, 13 Jun 2012 09:24:57 -0400, " snipped-for-privacy@att.bizzzzzzzzzzzz"

That depends. Where I would retire to (Florida) the home and condo prices dropped more than my home did. Anyway, I've always questioned the wisdom of including the equity of the home I live in as a component of net worth, since I have to replace it with other home equity in retirement. I don't intend to be a homeless dumpster-diver. So the only time my house will add to anybody's "net worth" will be when me and the wife are dead, and it'll be the heirs' net worth. Lot's of ways to look at it, though, and different situations people encounter. An investment rental home bought at the top of the market, for instance. Might have been a dumb thing to do, but it sure would affect net worth.
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On Wed, 13 Jun 2012 17:54:42 -0500, Vic Smith

That certainly can't be counted on.

There is a time when one cannot live in their own home anymore. My mother's home paid for her "senior housing". Yes, it is part of the net worth.

You *know* you'll never go into a "retirement" or nursing home? I wish I had your crystal ball.

So does the home you live in. Some people move during their lives. I'll take a pounding on the house we're getting ready to sell (it's down, probably 40% in three years). Whether that's made up by the lower price of the new house is yet to be seen. Both are *still* part of my net worth. There's no other way to look at it.
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On Wed, 13 Jun 2012 22:48:52 -0400, " snipped-for-privacy@att.bizzzzzzzzzzzz"

Well, I ain't your ma. I can figure a few ways to die before I get to that, all of them enjoyable.

I've left instructions to shoot me first. All I can do. Different strokes.

Figure it however you want. I figure my wealth didn't plummet because I never looked at my house as anything but the home I live in. Only looked at as a RE tax and maintenance expense for retirement purposes, or as trade-in value for a different house. Worked for me. I don't care how anybody else figures it.
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On Wed, 13 Jun 2012 22:17:59 -0500, Vic Smith

You *KNOW* that you'll die before you can no longer take care of your home? She lived in her own home until she was >85, and died at 95. Only in the last year were there any serious health issues that affected her quality of life. I guess you'd rather die than live, well, for a decade.

Silly.
You clearly don't care about reality.
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Bob F wrote:

At one Democratic National Convention, ten or so city cops were sitting in the entrance foyer. Every so often, as if on cue, the cops would all hold up a piece of cardboard, about the size of a playing card, with a number from 1 to 10 written on it.
This puzzled many an observer until it was deduced that the cops were grading any female delegates that entered the hall. I think the average score was about 5.3.
In my view, the episode was hilarious, but then I'm a Republican. Others claim this disrespect was the cause of the riots at the 1968 Chicago convention.
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Bob F wrote:

Have you ever seen a Democrat laugh?
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A maniacal laugh. They usually do "air quotes" and yammer about "lasers" or some such.
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The dummy does talk a lot but has nothing important to say.
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No, but largely to the Dem Congress and since Obama is the head of the Dem party, he certainly gets more of the credit. I also think the same under Bush while he still had a GOP Congress (although I think the main problem with the Bush deficit was related to the GOP finding out exactly how much fun it is to give people money and JOINING the Dems in sending money out hand over fist. Also Bush made a very Faustian bargain with the Congress that they would not question his defense spending and he wouldn't question their pork barrel spending. How else do you explain "War Spending" bills with around 40% domestic earmarks?"

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On Tuesday, June 12, 2012 4:23:27 PM UTC-4, Kurt Ullman wrote:

Congress was GOP-controlled from 2001-2006 under Dubbya. What happened then?
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In

But mommy, they did it toooooo?
You must have missed my earlier post:
Low taxes are necessary but not sufficient for a robust economy.
A rational, predictable regulatory environment is absolutely essential, but absolutely missing.
--
Bert Hyman St. Paul, MN snipped-for-privacy@iphouse.com

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Home Guy wrote:

Heh! Better get your dates straight.
For the 1st six years of the Bush administration (2000-2006), we did remarkably well. DJIA above 12,000, unemployment down to 4.5%, no inflation, 24 consecutive quarters of substantial economic growth, and so on. All this in spite of two wars, Katrina, and 9-11.
Then the Democrats took control of Congress and, as the report shows, personal wealth went into the toilet.
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