The Consequences of Debt: Americans’ Wealth Plummets 40% in Three Years

What will likely become a major campaign issue is the state of Americans’ wealth. Based on the following report from the Federal Reserve, the average American family’s wealth has decreased 40% from 2007 to 2010. The actual drop if you do the math is 38.8%. Simple math skills do not seem to be a requirement for reporters: inflation was not taken into consideration when writing the article. Adjusting the $126,400 in 2007 for inflation in 2010, the actual number is $132,930.83. The drop in wealth adjusted for inflation is actually 41.8%. In three years.

Since the housing market has not recovered and is still in decline, extrapolating this figure through 2012 and only adjusting for inflation (not housing prices which are still declining), the loss in wealth is 49.8%. In less than five years, the average American has lost 50% of their wealth. According to usdebtclock.org, the current liability per taxpayer is $1,048,264.  What happens when we have to pay our “fair share”?

Isn’t that the goal? Redistribution of wealth does not mean everyone becomes richer: it means everyone becomes poorer until they are in debt. Once a person is indebted to another person, company or government, they can be controlled. Isn’t this the definition of slavery? Once we understand that freedom is the opposite of slavery, we can focus on the common goal to restore our country. We can also focus on the cause of our slavery through debt: our elected officials. Love of country does not mean supporting the government: Love of Liberty requires us to defend freedom at all costs with sacred Honor.

David DeGerolamo

See additional comments on Tea Party Nation.

Fed: Americans’ wealth dropped 40 percent

The net worth of the American family has fallen to its lowest level in two decades, according to government data released Monday, driven by a more than 40 percent drop in their stakes in their homes.

The Federal Reserve’s detailed survey of consumer finances showed families’ median wealth plunged from $126,400 in 2007 to $77,300 in 2010 — a 39 percent decline. That put them on par with median wealth in 1992.

The Fed’s data underscore the depth of the wounds of the Great Recession and how far many families remain from healing. The median value of Americans’ debt did not change between 2007 and 2010. Meanwhile, the housing market crash inflicted particularly severe damage, with the Fed showing that the median value of Americans’ equity in their homes plunged 42.3 percent between 2007 and 2010.

The survey is conducted every three years, and this report offers one of the most exhaustive looks to date at the greatest economic upheaval in a generation. Although there have been some signs that the recovery has picked up steam — housing prices have begun to stabilize and unemployment has fallen — Fed economists said those improvements largely do not change the survey results.

“Recovery from the so-called Great Recession has also been particularly slow,” the Fed said in its report.

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1 Response to The Consequences of Debt: Americans’ Wealth Plummets 40% in Three Years

  1. Yup. Had $55K in savings when it started and now have 0. Have a home equity loan to the tune of $96K and if interest would go to around 20% as it did in the early eighties, I’m doomed. IF, I was able to sell my house, trailer and business in Cape Carteret, I could move back to Dixieland with the last 7 years down the drain, but nobody is buying and business is getting worse.

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