Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill...

Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill in Washington, before the Joint Economic Committee about the health of nation's economy, the slumping recovery, and the European debt crisis. (June 7, 2012) Credit: AP

The recession wiped out nearly two decades of Americans' wealth, according to government data released Monday, with middle-class families bearing the brunt of the decline.

The Federal Reserve said the median net worth of families plunged by 39 percent in three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were back in 1992.

The data represent one of the most detailed looks to date of how the economic downturn altered the landscape of family finance. Over a span of three years, Americans watched progress that took almost a generation to accumulate evaporate. The promise of retirement built on the inevitable rise of the stock market proved illusory for most. Home ownership, once heralded as a pathway to wealth, became an albatross.

Those findings underscore the depth of the wounds of the crisis and how far many families remain from healing. If the recession set Americans back 20 years, economists say, the road forward is sure to be a long one. And so far, the country has only seen a halting recovery.

"It's hard to overstate how serious the collapse in the economy was," said Mark Zandi, chief economist for Moody's Analytics. "We were in free fall."

The recession caused the greatest upheaval among the middle class. Only roughly half of middle-class Americans remained on the same economic rung during the downturn, the Fed found. Their median net worth -- the value of assets such as homes, cars and stocks minus any debt -- suffered the biggest drops. The wealthiest families, by contrast, actually saw their median net worth rise slightly.

Americans have tried to rebalance the family budget but have found it difficult to reverse the damage.

The survey showed fewer families are carrying credit card balances, and those who do have less debt. The median balance dropped 16 percent, from $3,100 in 2007 to $2,600 in 2010. The Fed also found that the percentage of Americans who don't have any debt at all rose to a quarter of families.

But that progress was undermined by other factors, leaving the median level of family debt unchanged. The report said more families reported taking out education loans. Nearly 11 percent said they were at least 60 days late paying a bill, up from 7 percent in 2007. And the percentage of families saddled with debts greater than 40 percent of their income stayed flat.

Not only were Americans still facing significant debts, but they were making less money. Median income fell nearly 8 percent to $45,800 in 2010. The median value of stock market-based retirement accounts declined 6 percent to $44,000.

The Fed's survey is conducted every three years. Although there have been some signs that the recovery has picked up steam -- housing prices have begun to stabilize and unemployment has fallen -- Fed economists said those improvements largely do not change the survey results.

Get the latest news and more great videos at NewsdayTV Credit: Newsday

Newsday's political experts breakdown what's next for Dems ... Suffolk cybersecurity ... Cleaning up the beaches ... Sunflower fields

Get the latest news and more great videos at NewsdayTV Credit: Newsday

Newsday's political experts breakdown what's next for Dems ... Suffolk cybersecurity ... Cleaning up the beaches ... Sunflower fields

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