Public Policy Options to Build Wealth for America's Middle Class

Abstract

American families lost close to $20 trillion in the early stages of the crisis of 2007-2009. Wealth remained well below its peak levels, even after the recovery had taken hold. Public policy can help families rebuild their wealth more quickly. Quicker and larger wealth gains will provide families with more of a private safety blanket and thus allow them to better plan for their future. This paper discusses several steps that policymakers could take to improve wealth building for many low-income and middle-income families, whose wealth had been hardest hit during the crisis. These policy efforts are intended to streamline savings incentives, to improve market transparency in asset and credit markets, and to increase competition in key markets for savings and debt.