America's Lost Decade: Typical Household Wealth Has Plunged 36% Since 2003

Tyler Durden's picture

Does it feel like you're poorer? There is a simple reason why - you are! According to a new study by the Russell Sage Foundation, the inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36% decline... Welcome to America's Lost Decade.

Simply put, the NY Times notes, it’s not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.

The reasons for these declines are complex and controversial, but one point seems clear: When only a few people are winning and more than half the population is losing, surely something is amiss.

 

As Russell Sage Foundation concludes, through at least 2013, there are very few signs of significant recovery from the loss of wealth experienced by American families during the Great Recession. Declines in net worth from 2007 to 2009 were large, and the declines continued through 2013. These wealth losses, however, were not distributed equally. While large absolute amounts of wealth were destroyed at the top of the wealth distribution, households at the bottom of the wealth distribution lost the largest share of their total wealth. As a result, wealth inequality increased significantly from 2003 through 2013; by some metrics inequality roughly doubled.

 

The American economy has experienced rising income and wealth inequality for several decades, and there is little evidence that these trends are likely to reverse in the near-term.

 

It is possible that the very slow recovery from the Great Recession will continue to generate increased wealth inequality in the coming years as those hardest hit may still be drawing down the assets they have left to cover current consumption.

The inequality-battler-in-chief remains unaware of the greatest irony of this surging rich-getting-richer as poor-get-poorer society:

 Inequality in the U.S. today is near its historical highs, largely because the Federal Reserve’s policies have succeeded in achieving their aim: namely, higher asset prices (especially the prices of stocks, bonds and high-end real estate), which are generally owned by taxpayers in the upper-income brackets. The Fed is doing all the work, because the President’s policies are growth-suppressive. In the absence of the Fed’s moneyprinting and ZIRP, the economy would either be softer or actually in a new recession. 

 

The greatest irony is that the President is railing against inequality as one of the most important problems of the day, despite the fact that his policies are squeezing the middle class and causing the Fed – with the President’s encouragement – to engage in the radical monetary policy, which is exacerbating inequality. This simple truth cannot be repeated often enough.

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InsurgoCasca's picture

Wealth effect, bitchez!

Greenskeeper_Carl's picture

i don't see how the author doesnt connect all the dots and see that it hasnt been a 'slow recovery'. we are in a depression and have been in one for nearly a decade. use a realistic deflator, such as the way we calculated inflation in 1980, and we havent had real growth since 2005.

Tulpa's picture

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

-- Upton Sinclair

nmewn's picture

Speaking of the salaries & perks of the parasitical class, here's some completely unexpected news no one could have ever seen coming...

Bloomberg's Top Advocate Admits Gun Control Proposals Wouldn't Stop Mass Shootings

“Because people perceive a mismatch in the policy solutions that we have to offer and the way some of these mass shootings happened, you know, it is a messaging problem for us, I think. … Is it a messaging problem when a mass shooting happens and nothing that we have to offer would have stopped that mass shooting? Sure it’s a challenge in this issue.”

http://blogs.wsj.com/washwire/2014/06/16/gun-control-advocate-snowden-obamacare-hurt-our-cause/

...not.

markmotive's picture

Money and debt built the American dream.

Great lecture by Chris Whalen

http://www.planbeconomics.com/2014/07/inflated-how-money-and-debt-built....

 

0b1knob's picture

About the only wealth most people have is the equity in their homes.    The real estate collapse of 2007-2009 is responsible for most of the decline.

disabledvet's picture

The shale boom gives lie to whole load of BULLSHIT.

WE THE USA ARE SAUDI ARABIA.
YET WE THE UNITED STATES ARE FLAT BROKE TOO.

"The wealth creators create more wealth while the debt creators create more debt." AND NEVER SHALL THE TWAIN MEET!

This is not rocket science anymore folks. "Your debt jubilee is to die in the Promise Land." (Apparently with a hundred to one kill ratio and the reckless abandonment of the very idea of humanity. In short a "War Crimes Tribunal.")

King David was no wussie...that's fer sure...but he was still a Christian...meaning any conversion by the Sword was NOT a true conversion. "You must drink of the body and blood and turn yourself WILLINGLY over to Him!"

Anyone who thinks the Bible was written by a Man is a nut...and I might add "so the Founding Fathers said of the United States Constitution."

Separation of powers, Bill of Rights, a Jury of your peers...NO BILLS OF ATTAINDER. This is what it means to be an AMERICAN.

That Basic Law was not founded in guilt but in BATTLE.

(So was the Code Napoleon I might add...

Pool Shark's picture

 

 

To me, the most shocking part of this study is that a full 25% of American Households have a net worth of just $3,200; and that 5% (1 out of 20) households has a negative net worth of -$27,416!

 

Shocker's picture

We are on Year 5 of the Recovery correct?

Layoff List: http://www.dailyjobcuts.com

-

Elvis the Pelvis's picture

The American middle class is dying on the vine.  Bitchez.

old naughty's picture

and this is not going to end well.

GetZeeGold's picture

 

 

Is NOT ending well.....and we're not done yet.

 

Fixed it for you.

Divided States of America's picture

All the while that a typical wealth of a jewish household surged 3600 percent over the same period.

Son of Loki's picture

36% sounds about right as evidenced by the bankrupt furniture stores, empty strip malls, plunge in retial sales, dismale huose purchase numbers by Merikans, and poor car sales.

Raging Debate's picture

Son of Loki - The debt overhang by 2008 was 40%. Coincidence with this 36% corrolary number? I think not. But the debt was used to mask the outsourcing and the result of course is a declining living standard.

Never One Roach's picture

Seniors and Pensioners dependent on COLA have been serverely crushed with the measley 0% to 1.7% CPI the BLS prints since their COLA is directly linked to that despite food, local taxes, etc sky rocketing the last 8-10 years. I bet those folks are much more then 36% to 40% "less wealthy" now.

Jadr's picture

Don't upvote this tool pimping his shitty blog in every ZH article.

Colonel Klink's picture

Can one of the Tylers block this asshole's IP?

Omen IV's picture

is that what the Laugher curve means?

pazmaker's picture

What King David do you refer to??? If you are referring to King David of the Bible his time was way before Christ. Making him a Jew not a Christian.

All_Your_Base's picture

Indeed; I took it as of the same line as Jesus, "Son of David."

TheRideNeverEnds's picture

Woa now, if we start talking debt isnt the typical household net worth a negative number some multiple of their yearly income?

Ballin D's picture

If we count the debt the govt has given us with a gun to our heads.  

 

Whats 100+ trillion / (300 million * (1-.47))?  Im only counting tax payers.

Kayman's picture

Whalen is correct to a point. Money and Debt creation is necessary when you have a growing economy that makes products and creates solid middle class jobs; so new debt (and interest on debt) can be serviced from future (real) growth.

Once our criminal class started the stampede to outsource middle class jobs the link in the chain was broken. Without real income in the hands of the middle class the cancer will only continue to grow.

RKDS's picture

It's amazing how many people choose to not see this.

 

And it's sad to see how many people, including the dingbat who wrote this "article," choose to ignore the nosedive from 2003-2009 and find a way to blame Obama.

All Risk No Reward's picture

Money as debt built the Bankster dream...  Whalen isn't taking about that, though, is he?  Debt Money Fraud - the one topic none of the BIGS dare discuss lest the Debt Money Tyrant respond.

fxrxexexdxoxmx's picture

So called gun control advocates only seek to limit gun ownership from the people. They never make any effort to stop .gov agencies from acquiring guns especially military grade weapons.

Which for me proves that they are not anti-gun ownership, they are anti-who has the gun advocates. Never a reason to not deny the law abiding average person, always silent on .gov expansion.

Headbanger's picture

I agree but it's moar like:

Gun control advocates are sociopaths who want all guns taken from the masses so they can be controlled by the police and military for them.

 

nmewn's picture

The sound everyone just heard was Michael Bloomberg fainting and doing a faceplant into the floor ;-)

"In light of Heller, McDonald, and their progeny, there is no longer any basis on which this Court can conclude that the District of Columbia’s total ban on the public carrying of ready-to-use handguns outside the home is constitutional under any level of scrutiny.

Therefore, the Court finds that the District of Columbia’s complete ban on the carrying of handguns in public is unconstitutional.

Accordingly, the Court grants Plaintiffs’ motion for summary judgment and enjoins Defendants from enforcing the home limitations of D.C. Code § 7-2502.02(a)(4) and enforcing D.C. Code § 22-4504(a) unless and until such time as the District of Columbia adopts a licensing mechanism consistent with constitutional standards enabling people to exercise their Second Amendment right to bear arms.4 Furthermore, this injunction prohibits the District from completely banning the carrying of handguns in public for self-defense by otherwise qualified non-residents based solely on the fact that they are not residents of the District."

http://alangura.com/2014/07/victory-in-palmer-v-d-c/

ImReady's picture

Truly great news! Alan Gura is a GOD!!

nmewn's picture

It is good news, very good news.

But the bureaucracy will contnue on in its quest to be the sole provider of self defense. This is how they solicit patronage from the weak minded, its not over, it never is with them.

Stand firm, Molon Labe ;-)

MachoMan's picture

until such time as the District of Columbia adopts a licensing mechanism consistent with constitutional standards enabling people to exercise their Second Amendment right to bear arms.

The fuck?  The 2nd amendment doesn't give anyone the right to bear arms...  it merely prohibits the government from usurping that natural right.

RockyRacoon's picture

A fact which escapes many, including those who support the Second Amendment.  Self defense is a natural right, and one which carries with it the ability to match one's opponent in firepower if so chosen.   Full-auto included....

Monty Burns's picture

Exactly. They show little interest in seizing illegal guns, why even Eric 'My People' Holder supplies them to the Mexican drug cartels. Be under no doubt that the destruction of the middle class is the objective. A few years back I'd have thought it crazy, but Cloward-Piven seems to be the agenda.

rbg81's picture

The Fed is doing all the work, because the President’s policies are growth-suppressive. In the absence of the Fed’s moneyprinting and ZIRP, the economy would either be softer or actually in a new recession. 

The above line from the article is total BS.  ZIRP does rob from the Middle Class to enable the Government to support the lower classes with entitlement spending.  I think the economy and the Middle Class would be a lot stronger if not for ZIRP, because of the distortions it causes.

centerline's picture

And without ZIRP, existing debts would implode.  Rock, meet hard place.

Reality is that runaway government spending has finally run it's course.  And there is nothing anyone can do with interest rate policy to change this.

rbg81's picture

Reality is that runaway government spending has finally run it's course.  And there is nothing anyone can do with interest rate policy to change this.

Sadly, you are incorrect.  After ZIRP, comes Negative IRP (NIRP).  In that scenario, the Government makes $$ off its debt.  It only charges 1-2% for capital "preservation".  Don't think it won't come to that.

centerline's picture

I have no doubt that NIRP will come.  But that does NOT change the fact that there is nothing anyone can do with interest rate policy that is going to fix anything.  Period.

So, prove me incorrect here.  Where does NIRP lead?

Or, to get back onto your thesis, if not for ZIRP - what would have the outcome been?

And, dont get me wrong here.  It is clear that the government sided with banksters and not main street.  But, beneath all that - beyond the simpleton shit... we are in a massive ponzi scheme.  There is no way the monetary promises that have been made can be kept.  The choice made is the most obvious one from the perspective of the powerful... eat the middle class to buy time.

Dewey Cheatum Howe's picture

And that is game over time. Do you really think at that point anyone in their right mind will finance new debt issuance as the old debts come due? That will definitely put the dollar in the tank for good if they ever pull a stunt like that. You basically have to force people to buy new debt issuance with gun pointed at the head and there is no way to hide the intention or what you really are at that point no matter what bullshit they want sell it as like economic patriotism for example. That is a bunch of bullshit because you can easily have a United States of America without a federal government uniting the whole mess. All the obligations just become localized.

 

rbg81's picture

I think you're confused.  It is EASY to sell new debt these days, even junk bonds.  Its the only place to get yield.  Don't see that turning around any time soon.

Dewey Cheatum Howe's picture

Unless I am misunderstanding charging negative interest on things like T-bills won't provide yield for the holder only the issuer.

Doesn't really matter anyways since I think like half the outstanding Federal Debt is coming due by 2016. Don't quote me on the exact amount and date but end result is there is mostly likely going to be a default when this all comes due since it is mostly coming due all at the same time. If BRICS is up and running and is a true god's honest secondary option outside petrodollar that will all but guarantee a default in missed payments since anyone outside the US that can will probably not touch Treasuries with a 10 foot stick while existing shennigans are allowed to persist. You would wait until after the default happens then buy in when the interest rates have to spike if they can't force people to buy in at artificially depressed rates.

rbg81's picture

No, it won't.  NIRP can only "work" in an environment where people are so scared of any investment that they will pay a penalty to "preserve" the bulk of their $$, even if it means losing a little every year.  It would be targeted at people whose savings far exceed the FDIC protection limit--or if the FDIC is kaput.  Basically, think a very severe depression where a SOLID MAJORITY is dependent on the US Gov for survival, directly or indirectly.  You could argue, we are there now.

Also, we have ZIRP today, but could well have NIRP in the future.

OC Sure's picture

So, Zirp vs Nirp. Aren't we already at Nirp if we view Zirp vs Nirp as nominal yields vs real yields?

Dewey Cheatum Howe's picture

There is also good debt and bad debt. I agree if you are strictly chasing yield junk bonds are always a good bet if you do a little due dilligence first before buying in but if you are looking for value aka good debt muni bonds are a good place to look for it. If you are still in the system and want to do some good with your investing you invest locally where each dollar has a larger positive effect on every individual through said projects. With that said you still need to do due dilligence to determine which projects are actually beneficial and will generate revenue afterwards, like sewer bonds for example in urban areas.

 

And back to NIRP on Treasurys I can't see that happening unless they are about to default on debt payments. When you can't squeeze anymore blood out the stones that is like that last trick in playbook to avoid a default and that should be painfully obvious to everyone at that point. With that said I could be wrong since we've seen enough stuff we never thought we'd see in our lifetime already in the past couple of years.

 

OC Sure's picture

You are correct and another way of saying this is that the Fed is not doing any work; the purpose of the Fed is to steal, not to produce. It is the Fed's [counterfeiting] that necessarily causes lower interest rates because this theft simultaneously decreases productive work.

Yes, the economy of productive work would be stronger without the theft from it just like leeches removed from the host must improve the health of the host.

 

Da Yooper's picture

"When only a few people are winning and more than half the population is losing, surely something is amiss."

 

 

Nawwwwww come on people we need to loose money so the tribal bankers can make money

 

oyyyyyyyy

 

after all some banker needs our money to take a vacation 3 or 4 times a year  back to ISrahell

 

their economy depends on this

 

our military aid plus what the bankers skim allows their economy to function

 

at our expense

 


rbg81's picture

Yeah, its all the fault of the Joooos.  Because none of the bankers or the top 1% are non-Jews, right?  

Drama Queen much?

Da Yooper's picture

Just calling a spade

 

a spade

 

problem is some folks dont like or want the

 

truth

 

told

 

looks like you are one of

 

those