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Rea Hederman, Heritage Foundation Center for Data Analysis assistant director, on the economic recovery and latest survey from the Federal Reserve on ...
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The median US household lost a staggering.
At 39% of his wealth from 20072010.
With the middle class families can hit the hardest.
That's according to mr.
fed survey of consumer finances so in the middle class gonna bounce back ever feels like it's not at this point hears and answers.
Re better minutes isn't director for the heritage Foundation's center for -- and NASA's with us now you know what's really interesting to me -- is that.
People -- most of their wealth tied up in housing ages from 35 to fifty.
We -- totally hit the hardest that's like us yep that's all right that's all -- yes.
Yes absolutely what you're saying is that you know middle class families people with young children.
Those are the people who are really hit and devastated.
By the crash in the housing market.
Most people obviously housing is the bulk of their financial wealth about almost 13 of the family's total assets.
And for families with children that lost about 60000 dollars of wealth in just three years.
So the question is in the middle class is just not as much invested in stocks that those wealthier people.
So what's your argument perhaps they should look to the stock market not put old led -- -- housing -- get.
Yeah absolutely no the last ten years we've seen the majority of Americans slightly over 50% of all families have directly owned stock you know through an online trading company to their bank and they had specific shares -- -- stopped.
And the last three years that numbers dipped precipitously back below 50%.
It has a consequence the stock market has recovered far faster in the housing market and some middle class families are not illness that affects the recovery has -- is still on stock yeah.
Is that good corporate profits are at all time highs.
As you said the stock market has bounced back in yet.
We all its -- hoarding our cash right are we afraid to have to go through this again is that part of.
Yeah you know I think one of the things it's a little warning if you read this on the checking accounts and not using credit cards is much so there's a definitely a -- trust a financial instruments that people might not think they understand.
And that's one of the -- again stock ownership as doubts the lowest levels since 1997.
Before you know the -- market boom we remember what the Internet.
Correct -- -- -- arrived I guess is a silver lining credit card debt is coming down spending on education is going up and we don't know the stories of further these graduates -- -- saddled with huge amounts of debt.
And no job that you say in the long run it is a good investment.
Absolutely you know it's much better to see people spending on things -- booster human capital to acquire new skills better education.
Has the economy does start tree cover hopefully more more these people put together these new skills to good use.
It be able to achieve greater amount of lifetime earnings of well.
Has compare to carrying a massive amount of credit card debt which obviously doesn't buy as much human capitals education.
Every you surprised by the -- the findings because you know look so much that so -- must do everything we had into a house -- -- what we did what you know especially in this age group.
Were you surprised and you kind of expect this.
Well you know I'd scenes -- Earlier data so I wasn't too surprised like Nestle surprised about the magnitude of the entire drop -- -- we're talking about the lowest level of media network since 1992.
That's retired forty years of economic gains dropped and destroyed in three years.
Mean that's an awful lot a sharp drop for anybody to take I think that's one of the reasons that we're seeing that this recession is -- on so much is that people just aren't -- the recovered yet.
Got it better none of that Heritage Foundation thanks for all the detailed.
-- -- -- very much for having me down and of course the regulation of health care come down the pipe coming up next is never gonna give you.
