Last year's stock market and housing slumps wiped out nearly a fifth of the wealth of American families, the Wall Street Journal reports. The Federal Reserve announced yesterday that $11 trillion—more than the output of Britain, Germany and combined—was erased from the net worth of households in 2008, the biggest loss since it started keeping records.
Economists note, however, that debt failed to grow as assets sank, pointing to a new era of thrift that most believe will outlast the current downturn. Other analysts observe that that last year's staggering decline was preceded by an unusually long boom. "What's misleading about this being the biggest drop is that it was preceded by one of the biggest rises," says one economics professor.