The financial crisis from 2007 to 2009 cost every household in the U.S. between $50,000 and $120,000, according to the latest data from the Federal Reserve Bank of Dallas.
“The worst downturn in the United States since the 1930s was distinctive. Easy credit standards and abundant financing fueled a boom-period expansion that was followed by an epic bust with enormous negative economic spillover,” the bank’s economists wrote.
The data show that U.S. household net worth fell by 24 percent in the period from the third quarter of 2007 through the first quarter of 2009. That was a drop of $16 trillion.
“Our bottom-line estimate of the cost of the crisis, assuming output eventually returns to its pre-crisis trend path, is an output loss of $6 trillion to $14 trillion. This amounts to $50,000 to $120,000 for every U.S. household, or the equivalent of 40 to 90 percent of one year’s economic output,” the report concluded.