A startling new study proves that America’s Middle Class has been utterly, completely wiped out — these are the people all politicians are always talking to, in theory. What happened? Apparently, wages have been declining for thirty or forty years and pensions have vanished and the one asset 90% of middle class people owned is no longer worth anything. (That asset is “their house,” and many have also lost the actual house, in addition to its supposed value before the crash.)
On average, American homeowners lost 55% of the wealth in their home.
Most middle-class families didn’t have much wealth to begin with — about $100,000. For the 22 million families right in the middle of the income distribution (those making between $39,000 and $62,000 before taxes), about 90% of their assets was in the house. Now half of their wealth is gone and it will never come back as long as they live.
Whoa, why such a Negative Nancy? Didn’t we also have a recovery since then?
Yes we did: “The rich recovered; the rest of us didn’t.”
This seems like something the Democrats would be interested in, right? Well yes, the Democrats are — like the Republicans — interested in the rich.
But how did we, uh, even manage to survive during the first decade of this awful century? Experts say it’s because the Middle Class took out home equity loans to make up for all the raises they weren’t getting. That’s how America kept spending money (and charging more on those high-limit credit cards everybody got the week after they signed a fraudulent mortgage document) from 9/11 onward.
Meanwhile, a grim new report shows that Americans have cut their spending, on average, by $175 per month since the financial collapse. That adds up to $7,300 since the bubble burst, per American, And that adds up to $2.3 trillion American Consumers haven’t spent since they stopped consuming, which happened when they … ran out of money, forever. [Marketwatch/Business Week]