In more bad economic news for President Obama, the Federal Reserve released information today that showed that the median worth of American families dropped 40% between 2007 and 2010. In money terms, the drop was from $126,000 to $77,000, bringing the monetary value of families down to the same levels as 20 years earlier. During this same period of time, the Federal Reserve reported that family income fell by 7%.
According to the Fed, much of this decline can be traced to the decline in housing values, since much of families’ worth has been sunk into the worth of their homes. So, while housing values fell in much of the nation, in the West, where houses prices declined the most, the loss in asset valuation was particularly hard hit. In that region, median families assets declined by more than 55%. I know that housing prices in some parts of the west have yet to begin to rebound, since we have been looking at homes in Oregon.
It is likely that during the upcoming election campaign, the economy will be the primary issue. Because of the trepidation felt by many baby boomers as retirement nears, it is likely that people have decided to work a few more years to make up for their decline in assets. This probably will make them think twice before casting their votes for Obama. Romney has to make a case that his economic plan will induce the economy to rebound; if he does, he will likely see his chances of election improve.