Obama to Blame for Americans' 39% Drop in Wealth
By Paul Scicchitano
NewsMax.com
The Federal Reserve reports today that American
families have about the same net worth under the
Obama administration that they had 20 years ago when
George H.W. Bush occupied the White House, leading
Republican strategist Bradley A. Blakeman to tell
Newsmax, “It’s like Groundhog Day.”
The Fed’s findings, which are contained in its
latest Survey of Consumer Finances, found that
median wealth for families plunged by 39 percent to
$77,300 in 2010 — down from $126,400 in 2007. The
median marks the point where half of U.S. families
had more and half had less. The recession officially
began in December 2007 and ended in June 2009.
“This is a scary and ominous sign, not only of the
present but of the future,” charged Blakeman in an
exclusive interview after the findings were
released. “It’s like . . . we’re back in 1992. It is
bizarre.”
Former GOP presidential candidate Rick Santorum
agreed in an email to supporters this evening.
“Regardless of what President Obama says, the
private sector is not doing fine,” penned the former
Pennsylvania senator. “Out of control government
spending, growing entitlements, heavy regulatory
burdens and national debt continue to impede
business growth. We need jobs, but in this
environment, business growth is almost impossible.”
Blakeman, who was a senior member in the last Bush
administration, noted that net worth takes years for
Americans to build. “Net worth is something that you
accumulate over time, and it takes a long time for
people to amass assets, yet their assets were almost
wiped out overnight in 2008 and they’ve never seen a
recovery of the assets they’ve lost,” he said.
After adjusting for inflation, the Fed’s report
indicates that Americans are no better off than they
were years before the start of the dot-com bubble,
the housing bubble, 9/11, or the Iraqi war.
“People are looking at their IRAs. They’re looking
at their housing prices — and you’re supposed to
appreciate in value, not depreciate,” said Blakeman,
a professor of public policy, politics, and
international affairs at Georgetown University who
appears regularly on Fox News and also is a Newsmax
contributor.
“We’ve been in a depreciation cycle, which has hurt
people — especially of retirement age, or people who
have been retired a while — because they’ve seen
their incomes drastically reduced and now they have
a problem making ends meet.”
The Fed’s detailed Survey of Consumer Finances,
which has been done every three years dating back to
1989, attributed much of the drop in net worth —
from 2007 to 2010 — to the collapse of the housing
market, which drove down home values.
Among families that owned homes, the Fed survey
found that their median home equity declined from
$95,300 in 2007 to $55,000 in 2010, a drop of 42.3
percent.
The Fed survey found that median incomes also fell
from $49,600 in 2007 to $45,800 in 2010, a drop of
7.7 percent.
“This tells me that the recovery that the president
claims — that the private sector is doing fine —
certainly shows that the private sector is not doing
fine at all,” added Blakeman, noting that the report
shows President Obama has done little to raise up
average Americans under his watch.
“All you have to do is look at housing prices that
have tumbled. Look at your IRAs. My IRA is down
about 30 percent,” said Blakeman. “And it’s likely
not to recover any time soon to what it was prior to
2008. So instead of me being ahead — or even
catching up to where we were in 2008 — we’re still
far behind. The net worth of the average American
has tragically been reduced and this president is
the reason why the recovery has not happened. We’re
digging ourselves a deeper hole, both in net worth
and in future debt.”
While the Fed survey found that the proportion of
families carrying a credit card balance fell to 39.4
percent in 2010, American families still got
hammered overall, largely due to the 42.3 percent
decline in home equity. The percentage of families
with credit card balances had been 6.7 percent
higher in 2007.
Moreover, the median balance of credit card balances
fell from $3,100 in 2007 to $2,600 in 2010, a drop
of 16.1 percent.
The Fed’s survey of consumer finances contains
information only through 2010. A separate survey the
Fed released last week showed that total family net
worth climbed 4.7 percent in the January-March
quarter to $62.9 trillion, about 28 percent above
its recession low. The increase was fueled by stock
market gains.
Those gains put net worth about 5 percent below its
pre-recession peak of $66 trillion. But since the
first quarter ended, lower stock prices have eroded
some household wealth.
The proportion of families with debt that had a debt
payment that was late by 60 or more days during 2010
rose to 10.8 percent, up from 7.1 percent in 2007.
“It is fair to blame the president because our
country is not showing the signs of recovery because
of his policies,” Blakeman insisted, pointing to
Obama’s emphasis on healthcare reform while
Americans continued to suffer.
“Businesses and everybody are being put on hold
while the Supreme Court now takes on this case. He
created a constitutional crisis on healthcare at the
expense of the economy and the housing crisis.”
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