Date published: January 9, 2012
Americans are quickly getting poorer as the much-touted economic "recovery" remains elusive. Household wealth plummeted by more than four percent from July to September, according to a report released in December by the Federai Reserve, marking the steepest drop since 2008 and the second quarterly decline in a row. That represents an average loss of about $2 1 ,000 per household in just three months.
At the end of the third quarter, household wealth plunged by $2.4 trillion, from a total of about $60 trillion down to slightly less than $57.5 trillion. The dramatic drop in net worth - the value of all assets minus total debts and liabilities - was led by still-declining housing prices and crashing stock values.
Despite wild money printing by the Fed in recent years, home values are not expected to recover anytime soon. During the third quarter, American real estate assets lost about $100 billion from the previous quarter. And banks are still sitting on an unknown but huge number of foreclosed properties expected to keep prices depressed for years to come.
Stocks performed terribly last quarter, too, though they have recovered some of those losses so far. The S&P500 Index lost around 1 4 percent from July to September. And according to the Dow Jones U.S. Total Stock Market Index, equities shed $2.6 trillion for the quarter.
The Associated Press reported that 401(k) accounts managed by Fidelity Investments, the biggest workplace plan provider, dropped almost 1 2 percent. The value of pension-fund reserves also plunged close to $1 trillion for the quarter.
Wages are suffering as well. Data from the Census Bureau cited by the AP show that, adjusted using the government's measure of inflation, household income plummeted 6.4 percent last year from 2007 when the recession began.
Meanwhile, overall debt is ballooning - led, of course, by Washington, D.C., and Congress. According to the Fed report released on December 8, federal government debt grew at an annual rate of 14 percent during the third quarter.
Even as many Americans rapidly lose their savings, prices for most essentials - food, gasoline, energy, and more - have largely continued to rise. Despite the Obama administration's claims, the so-called "stimulus" package failed spectacularly to "create" real jobs or any wealth. Instead, American taxpayers have simply been saddled with almost $ 1 trillion in new, unproductive debt.