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Thread: Recession kicked median household wealth to 1992 level

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    Recession kicked median household wealth to 1992 level

    The median U.S. household lost nearly 39% of its wealth from 2007 to 2010, the Federal Reserve said Monday, emphasizing anew the impact of the financial crisis and the recession on ordinary Americans.

    Middle-class families took the biggest hit to their net worth during the crunch because much of their wealth was in their homes, whose values plunged during the recession and in its aftermath, the Fed report said. Wealthier families saw a smaller drop in their incomes, but nowhere near as much impact on their net worth.


    "Richer people owned more bonds that didn't get killed," Hoyt said. "For middle-income households, their primary asset is their house, and the government stimulus backstopped incomes at the low end."
    The median family's net worth dropped to $77,300 from $126,400 in 2007, the Fed said. The wealthiest 10% of families saw their median net worth rise 1.9% to $1.17 million.

    The last paragraph is the most pertinent, The middlecass net worth dropped from 126,400 to 77,000 and the RICH got richer. The evidence is all there right in front of everyones nose.

    Fed: Recession kicked median household wealth to 1992 level

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    Re: Recession kicked median household wealth to 1992 level

    Quote Originally Posted by lpast View Post
    The median U.S. household lost nearly 39% of its wealth from 2007 to 2010, the Federal Reserve said Monday, emphasizing anew the impact of the financial crisis and the recession on ordinary Americans.

    Middle-class families took the biggest hit to their net worth during the crunch because much of their wealth was in their homes, whose values plunged during the recession and in its aftermath, the Fed report said. Wealthier families saw a smaller drop in their incomes, but nowhere near as much impact on their net worth.


    "Richer people owned more bonds that didn't get killed," Hoyt said. "For middle-income households, their primary asset is their house, and the government stimulus backstopped incomes at the low end."
    The median family's net worth dropped to $77,300 from $126,400 in 2007, the Fed said. The wealthiest 10% of families saw their median net worth rise 1.9% to $1.17 million.

    The last paragraph is the most pertinent, The middlecass net worth dropped from 126,400 to 77,000 and the RICH got richer. The evidence is all there right in front of everyones nose.

    Fed: Recession kicked median household wealth to 1992 level
    Housing prices dropped.
    Which is the cause of the this.

    As I said in another thread, houses are liabilities not assets.
    Putting the largest share of your wealth, in an illquid speculative "investment" is foolish.
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    Yeah I don't really view houses as an asset either, or much of an investment for wealth for that matter. Unless you buy a home for a rental property, or are a flipper who does it for fun with no skin on your back lost if it doesn't make any money, houses should be bought as a place to live and call home, and nothing more. Buying a house with the expectation that it will increase in value, or not decrease in value, isn't very wise, IMO.
    Last edited by The Man; 06-12-12 at 06:26 PM.

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    Re: Recession kicked median household wealth to 1992 level

    Quote Originally Posted by The Man View Post
    Yeah I don't really view houses as an asset either, or much of an investment for wealth for that matter. Unless you buy a home for a rental property, or are a flipper who does it for fun with no skin on your back lost if it doesn't make any money, houses should be bought as a place to live and call home, and nothing more. Buying a house with the expectation that it will increase in value, or not decrease in value, isn't very wise, IMO.
    Paradigm shift complete.
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    Re: Recession kicked median household wealth to 1992 level

    Quote Originally Posted by Harry Guerrilla View Post
    Housing prices dropped.
    Which is the cause of the this.

    As I said in another thread, houses are liabilities not assets.
    Putting the largest share of your wealth, in an illquid speculative "investment" is foolish.
    Um, not sure I agree Harry, of all the investments one can make, real estate is about as safe as it gets, housing crash of 2008 notwithstanding.

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    Re: Recession kicked median household wealth to 1992 level

    Quote Originally Posted by Harry Guerrilla View Post
    Housing prices dropped.
    Which is the cause of the this.

    As I said in another thread, houses are liabilities not assets.
    Putting the largest share of your wealth, in an illquid speculative "investment" is foolish.
    My home is paid off. I pay my monthly bills and $800 a year in taxes, how exactly is that a liability?
    "Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence." - John Adams

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    Re: Recession kicked median household wealth to 1992 level

    Quote Originally Posted by Prof. Peabody View Post
    My home is paid off. I pay my monthly bills and $800 a year in taxes, how exactly is that a liability?
    I am insanely jealous of your property taxes. CT is not so low.
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    Re: Recession kicked median household wealth to 1992 level

    This is Breaking news?
    http://www.debatepolitics.com/econom...pay-taxes.html

    Spreading the wealth - Los Angeles Times
    November 08, 2010
    By Michael I. Norton and Dan Ariely

    The gap between rich and poor in the U.S. is bigger than at any time since the 1920s. Is that really what most Americans want?

    The gap between the wealthiest Americans and the poorest is bigger than at any time since the 1920s — just before the Depression. According to an analysis this year by Edward Wolff of New York University, the top 20% of wealthy individuals own about 85% of the wealth, while the bottom 40% own very near 0%.
    Many in that bottom 40% not only have No assets, they have Negative net wealth.


    A gap this pronounced raises the politically divisive question of whether there is a need for wealth redistribution in the United States. This central question underlies such hot-button issues as whether the Bush tax cuts should be allowed to expire and whether the government should provide more assistance to the poor. But before those issues can be addressed, it's important to understand how Americans feel about the country's increasing economic polarity.

    We recently asked a representative sample of more than 5,000 Americans (young and old, men and women, rich and poor, liberal and conservative) to answer two questions. They first were asked to estimate the current level of wealth inequality in the United States, and then they were asked about what they saw as an ideal level of wealth inequality.

    In our survey, Americans drastically underestimated the current gap between the very rich and the poor. The typical respondent believed that the top 20% of Americans owned 60% of the wealth, and the bottom 40% owned 10%. They knew, in other words, that wealth in the United States was not distributed equally, but were unaware of just how unequal that distribution was....
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    Quote Originally Posted by Blue_State View Post
    I am insanely jealous of your property taxes. CT is not so low.
    Same here! I'm in PA, and where I live, in a modest 1500 sqft home that is well below the average home value in my county, township and school district, my annual property taxes are well over double $800/year.

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    Re: Recession kicked median household wealth to 1992 level

    Quote Originally Posted by mbig View Post
    Ha, he linked the thread he started.

    If it worked that way, there would never be breaking news. The Russians wouldn't be supporting Syria. Tryvon who? Oh, and our politics went partisan in America.
    Last edited by Blue_State; 06-12-12 at 07:02 PM.
    We went from sticks and stones may break my bones but words will never hurt me to safe spaces.

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