![](https://d3ilqtpdwi981i.cloudfront.net/jD3k4f-2k9aVOtWOhgGXwGxBVjs=/425x550/smart/https://bepress-attached-resources.s3.amazonaws.com/uploads/b4/e4/b6/b4e4b68c-69d3-4423-a05f-2f1e542d607a/thumbnail_a9abe0ce-c99e-4ae4-a1b3-991e10347b51.jpg)
The financial crisis of 2007 to 2009 took a tremendous toll on household wealth and shattered the sense of financial security for millions of American families. American households lost more than $20 trillion in wealth (in 2012 dollars) in the Great Recession, and households still had $10 trillion less in wealth at the end of 2012 than they had before the crisis. This massive wealth decline contributed to a widespread loss of economic security, particularly among lower-income and moderate-income families, single women, and communities of color.
This economic insecurity can have long-ranging adverse effects on U.S. economic growth as American families:
- Invest less in new businesses, which slows productivity growth and innovation
- Save less for large long-term expenses such as retirement and their children’s college tuitions, which leads to less-stable financing for capital investments
- Become less likely than they would with more wealth to switch jobs and careers when better opportunities arise, which slows employees’ productivity
The bottom line: Economic insecurity from decimated household wealth today could potentially reverberate through our nation’s economy for a long time through slower growth, fewer jobs, and lower living standards. Helping households rebuild their wealth should therefore be a top policy priority.
Available at: http://works.bepress.com/christian_weller/16/
Published by the Center for American Progress: http://www.americanprogress.org/wp-content/uploads/2013/07/UniversalSavingsCredit-report.pdf.