…It might be well if you would ask yourself, are you better off than you were four years ago? Is it easier for you to go and buy things in the stores than it was four years ago? Is there more or less unemployment in the country than there was four years ago? Is America as respected throughout the world as it was? Do you feel that our security is as safe, that we’re as strong as we were four years ago?
President Ronald Reagan
President Reagan may just as well be speaking to us today.
The answer, as it was in November of 1980, is a resounding NO.
The Great 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 biggest drops occurred among middle-income Americans, whose wealth was inextricably linked to the housing market boom and bust.
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 freefall.”
In July of 2010 we offered evidence that America’s middle class was being systematically wiped out. Today we learn how truly horrific this wealth destruction really is.
And, it’s only going to get worse.
While government (un)employment statistics show that 8.3% are out of work, the number is closer to 22% – those are great depression numbers. If you lose your job today, there is a strong possibility you won’t be finding any meaningful labor any time soon. And for those just exiting college with hundred thousand dollar degrees in their hands, the prospect of ever finding a job and paying of those loans is almost nil.
Moreover, whatever money you do make (or save) will rapidly lose value as inflation, downplayed by the government of course, takes hold at a rate in excess of 10% per year, which means your money will be cut in half by 50% within seven years:
On top of that we have more Americans on food stamps today than ever before – twice as much as when President Obama took office and rapidly approaching 50 million (some 1 in 6 Americans!) – and half of American households receiving some form of government assistance or disbursement.
These are serious numbers and considering that we are nowhere near the end of this Recession, and are more than likely in the midst of another Great Depression, we can fully expect the wealth of our nation to further disappear.
Now is the time to save and prepare, because things are not going to get any better anytime soon.