Failed GOP Policies Wipe Out 2 Decades of Family New Worth

I continue to be amazed at how the GOP gets away with using religion - i.e., anti-abortion and anti-gay stances - and racial prejudice against blacks and Hispanics to dupe working Americans into to supporting GOP policies that have proved utterly toxic to the well being of voters being duped by Republicans.  For working class and middle class Americans, one doesn't need other enemies when it comes to bringing on financial ruin.  The GOP's unfunded wars, excessive tax cuts for the wealthy, a woefully under regulated Wall Street, obstruction of stimulus spending and serious plans to salvage the devastated housing market, and now the slashing of government employment all add up to a truly poisonous mix.  The result?  Family/household wealth has been wiped out and two decades of economic gain is gone.  Were back at 1990 levels in terms of family net worth overall, and many families are far worse off.  An article in the New York Times looks at this horrific situation.  Here are highlights:

The recent economic crisis left the median American family in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, the Federal Reserve said Monday.
 

A hypothetical family richer than half the nation’s families and poorer than the other half had a net worth of $77,300 in 2010, compared with $126,400 in 2007, the Fed said. The crash of housing prices directly accounted for three-quarters of the loss. 

Families’ income also continued to decline, a trend that predated the crisis but accelerated over the same period. Median family income fell to $45,800 in 2010 from $49,600 in 2007. All figures were adjusted for inflation. 

While the numbers are already 18 months old, the survey illuminates problems that continue to slow the pace of the economic recovery. The Fed found that middle-class families had sustained the largest percentage losses in both wealth and income during the crisis, limiting their ability and willingness to spend.  

Given the scale of those losses, consumer spending has remained surprisingly resilient. The survey also illuminates where the money is coming from: American families saved less and only slowly repaid debts. 

More families said they were saving money as a precautionary measure, to make sure they had enough liquidity to meet short-term needs. Fewer said they were saving for retirement, or for education, or for a down payment on a home. 

Families with incomes in the middle 60 percent of the population lost a larger share of their wealth over the three-year period than the wealthiest and poorest families.   One basic reason for this disproportion is that the wealth of the middle class is mostly in housing, and the median amount of home equity dropped to $75,000 in 2010 from $110,000 in 2007. And while other forms of wealth have recovered much of the value lost in the crisis, housing prices have hardly budged.  Those middle-income families also lost a larger share of their income. 

Wealthier families, which derive more income from investments, were also cushioned against the recession.     .   .   .  Ranking American families by income, the top 10 percent of households still earned an average of $349,000 in 2010.  The average net worth of the same families was $2.9 million.