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Earlier this year, President Joe Biden boasted that the stock market had hit "record after record after record on my watch, while making things more equitable for working-class people." Since Biden took office, U.S. investors have reportedly lost an estimated $7.6 trillion. The records purportedly set on his watch were wiped out this summer. Moreover, owing to the inflation exacerbated in part by the president's executive orders, American working families have lost $4,200 in real income and will have to spend an additional $11,500 just to maintain past living standards.
\u201cPres. Biden: "The stock market\u2014the last guy's measure of everything\u2014is about 20% higher than it was when my predecessor was there."\n\n"It has hit record after record after record on my watch, while making things more equitable for working class people." https://t.co/ZMuUD5E2Pt\u201d— ABC News (@ABC News) 1641574895
CNBC reported that Americans' holdings of corporate equities and mutual fund shares fell from $42 trillion at the beginning of the year to $33 trillion at the end of Q2 2022 — a $9 trillion drop.
Further precipitous drops observed since July in major market indices (e.g., the S&P 500 stock index is down 23%) as well as in the bond market (bond market index funds are down 15% this year) put estimates of wealth loss from financial markets between $9.5 trillion and $10 trillion.
It's not just big-time traders like House Speaker Nancy Pelosi and her husband or tech billionaires who might be feeling the impact, though the wealthiest 10% of Americans have lost $8 trillion in stock market wealth this year.
Fox News Digital indicated that savers who have diligently put their money into IRAs along with pensioners and and taxpayers may be hard hit.
Trillions of dollars in value have been erased from Americans' retirement savings.
Alicia Munnell, director of the Center for Retirement Research at Boston College, noted that from year-end 2021 to June, 401(k) plan participants had lost nearly $1.4 trillion and that Americans with IRAs had lost $2 trillion.
Citing data from the Wilshire Trust Universe Comparison Service, the Wall Street Journal reported last month that "public pension plans lost a median 7.9% in the year ended June 30 ... their worst annual performance since 2009 and a fresh sign of the chronic financial stress facing governments and retirement savers."
This "damage," much of which occurred in April, May, and June, has been attributed to "intense pressure driven by concerns about inflation, high stock valuations and a broad retreat from speculative investments."
These losses, which "pummeled household and institutional investors alike," will mean for state and local governments higher annual retirement contributions in the coming years, diminished services, and tax hikes.
Public pensions funds, noted the Journal, "have hundreds of billions of dollars less on hand than they will need to cover future benefit promises."
The hit to investors' wealth may adversely effect spending, borrowing, and investing.
According to Mark Zandi, chief economist of Moody's Analytics, these recent losses that have occurred with Biden in office might reduce real GDP growth by roughly 0.2 percentage points in the coming year. "The loss of stock wealth suffered to date, if sustained, will be a small, but meaningful headwind to consumer spending and economic growth."
Zandi suggested that consumer spending may be reduced by $54 billion next year.
Larry Kudlow, the former director of the National Economic Council, wrote on Tuesday: "Every time Mr. Biden goes out there and talks about 'zero inflation' and a strong economy, he's begging the credulity of every American. Nobody believes him."
Kudlow suggested that this lack of confidence in the president was well captured in a recent Washington Post/ABC News poll showing Republicans holding a 21% lead in key swing districts across the country.
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Joseph MacKinnon is a staff writer for Blaze News.