It's a disaster out there.

As fellow Fool Alex Dumortier wrote earlier this week, global wealth was bludgeoned by $50 trillion over the past year or two -- an amount equal to twice the amount of profits every U.S. company has made since 1929.  One step forward, 80 steps back.

But a report by the Federal Reserve released this morning paints a picture that, in perspective, doesn't seem so abysmal. U.S. household net worth fell 18% in 2008, sending us back to just below the same wealth level as 2004.

I remember 2004. I don't recall it as a period of abject poverty. I don't remember talk of breadlines or tent cities. No one was griping about how poor we all were. Quite the opposite.

I remember obnoxiously long lines at Starbucks (NYSE:SBUX), an explosion of post-IPO Google (NYSE:GOOG) shares, and American consumers who acted like they were as wealthy as Bill Gates. In fact, 2004 was about as good as it gets for many Americans.

What's changed?

Two things: Leverage, and fear.

Total assets fell 15%, while total liabilities declined less than 1%, meaning we're leveraged to the gills, particularly after real estate prices fell off a cliff. Beyond that, we've got the most petrified consumers this country as ever seen (consumer confidence is currently at its lowest level ever). All this means that how wealthy we feel, and the outlook for how wealthy we think we'll be, has jettisoned from how wealthy we actually are (unadjusted for inflation, which has totaled roughly 10% since 2004). 

Stop, drop, and panic
The news is full of stories about how Citigroup (NYSE:C) and Bank of America (NYSE:BAC) are wandering around aimlessly at a time when unemployment is blowing through the roof. It's no surprise that, even if real wealth is equal to the glory days, people are shaking in their boots. As Warren Buffett recently said, "The percentage of people who are scared about losing their jobs in this country is way higher than the actual numbers that are going to lose them, but they're behaving in an entirely different manner."

So while it's a bloodbath out there, let's keep things in perspective. Heck, I'm gonna party like it's 2004.

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Fool contributor Morgan Housel doesn’t own shares in any of the companies mentioned in this article. Starbucks is a Motley Fool Inside Value and Motley Fool Stock Advisor  recommendation. Google is a Motley Fool Rule Breakers selection. The Fool owns shares of Starbucks. The Motley fool is investors writing for investors.