“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.