“the fall in the second half of 2008 will have given back part, but not all, of that prior increase.”
More specifically, net worth at the end of second Q 2008 was at the same level as first Q 2007. During that period, what went up came down. It is as if we are treading water, wealth-creation-wise.
If the government were really honest, they would provide a corresponding tally of the net present value of unfunded entitlements: that figure is $99.2 trillion, representing future obligations for Social Security and Medicare that are not covered by projected payroll taxes intended to finance them [http://www.dallasfed.org/news/speeches/fisher/2008/fs080528.cfm]. In other words, we will have to rely on either future borrowing or general taxes to cover these promises OR we will have to dramatically reduce the amounts promised to ourselves, our children and grandchildren.
It is absolute vital to avoid the media's ridiculous instances of *one entry accounting*, where they pretend something is *owed* without asking *who* it is owed *to*, or they pretend everyone is going to die because so-and-so doesn't repay a debt, without noticing that so-and-so doesn't mind not needing to repay it, so much.
There is no such thing as a net debt.
There *are* debts to foreign holders of financial claims, and they total about $13.5 trillion gross - but they are almost matched by our holdings of foreign financial claims running in our favor. The net is under $4 trillion, and dwarfed by household assets.