Last week featured one of the most comprehensive and troubling snapshots of how little the finances of most of us here in New York and around the nation have recovered from the Great Recession.
In its Survey of Consumer Finances, an 80-page in-depth report put out every three years, the Federal Reserve detailed the damage. The median net worth of the American family — those truly in the middle — fell by 39 percent between 2007 and 2011. That means household wealth is likely no higher now than it was two decades ago, in 1992.
And there were other zingers in the report. While incomes fell 7.7 percent for those in the middle — an unprecedented post-war decline — the Fed notes that median incomes for retirees and non-working adults were the only group to see their incomes rise since 2007. In other words, those not working are relatively better off today, income-wise, than those who are.
By any statistical measure in this exhaustive report, the Americans who have been hurt the most by the credit bust are truly in the middle in terms of age, income and wealth — the Generation Xers who came into the work force during and right after the Bush recession of 1991. It turns out that almost 55 percent of the median worth of Gen Xers has been wiped out since ’07 — and they will likely decide the election this fall.
That’s on top of the incredible escalation in the federal debt burden per US household since 2009, money that families in America will have to eventually pay back in taxes. Indeed, the size of the federal debt load per US household has risen 50 percent, to $190,000, since President Obama took office. That’s $190,000 in borrowed money per family from families with median incomes that have dwindled to $45,000, less than one-fourth of that $190,000.
Explaining that miserable math while providing a convincing plan to fix it is the task before Mitt Romney. Americans want solutions, not more parsing of the pathetic numbers.