Americans saw their net worth decline by $1.7 trillion in the first quarter - the biggest drop since 2002 - as declines in home values and the stock market ravaged their holdings.The economic damage done to the middle class has been so pronounced that those who were solidly middle class are now just scraping by and those in the lower middle class are now the working poor. Unfortunately that group is growing by the day while the rich are getting richer.
Meanwhile, the amount of equity people have in their homes fell to 46.2%, the lowest level on record.
The net worth of U.S. households fell 3% to $56 trillion at the end of March, according to the Federal Reserve's flow of funds report, which was released Thursday.
The value of real estate assets owned by households and non-profits declined by $305 billion, while financial assets fell by $1.3 trillion, led mainly by a $556 billion drop in stocks and a $400 billion decline in mutual funds.
The first quarter's decline follows a $530 billion drop in wealth in the fourth quarter of 2007.
We have the oportunity to start to rebuild the American middle class but it will take participation by all voting age Americans to effect the change that is necessary to restore sane fiscal policies that move people from poverty to middle class. Ignorance could literally mean death.