American Wealth Is Actually Still Ridiculously Enormous -- It's The Government That's Broke

Total private American net worth, measured by the value of both their home equity and stock value, fell by 26% during the financial crisis, as stock and housing values plummeted.

The Big Picture (TBP):

The value of US stock and housing equity fell 25.7% from the pre-crash peak (June 07) to the recent low –  $65.8 trillion down to $48.8 trillion — a destruction of value of nearly $17 trillion dollars.

Which means that if your total wealth didn’t fall by 26% at the darkest hour (but you will need a fair value of your house to calculate this), then congratulations, you outperformed.

American net worth then began rising again as stock markets recovered, Americans produced more wealth, and housing prices stabilised. It’s now falling again as the Bloomberg chart from TBP below shows. So if your wealth has continued rising even since the start of 2010, then congratulations, you’re outperforming (again?).

Chart

But here’s the catch — Even at the darkest hour of the crisis American private wealth stood at $48.8 trillion, and remained gargantuan relative to much of the world. In comparison, the entire federal debt is ridiculously huge, but it’s ‘just’ $13.5 trillion. America’s government is broke, but American people as a whole aren’t. On the individual American level, however, thanks to a substantial wealth skew in the U.S., many Americans are indeed broke while some others hold private wealth that continues to tower over much of the world.

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