The Great Depression 2.0 wiped out close to two decades of American wealth, with middle-class families, predictably, bearing the brunt of the losses.
According to the Federal Reserve the median net worth of families dropped from $126,400 in 2007 to $77,300 in 2010.
Over the span of three years, the progress that took almost a generation to accumulate disappeared.
“It’s hard to overstate how serious the collapse in the economy was,” said Mark Zandi, chief economist for Moody’s Analytics. “We were in free fall.”
Only about half of middle-class Americans remained on the same economic footing during the downturn. The value of assets such as homes, automobiles and stocks minus any debt suffered the biggest drops while the wealthiest families’ median net worth rose slightly.
Median income also fell by nearly 8 percent, to $45,800, in 2010. The median value of stock-market-based retirement accounts declined 7 percent, to $44,000 while the median value of Americans’ stake in their homes fell by 42 percent between 2007 and 2010, to $55,000, according to the Fed.
“Recovery from the so-called Great Recession has also been particularly slow,” the report said.
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