America’s middle class is disappearing.

The very Americans the Obama administration is hoping will lift the economy out of recession are facing epic challenges.

NEW YORK CITY’S MIDDLE CLASS IS VOTING WITH THEIR FEET

As a result of a sizeable drop in home values, along with over-extended credit and rising unemployment, as many as one in four of the 31 million middle class families are in danger of dropping a rung on the economic ladder, statistics show.

That’s as many as eight million families in the last nine years, with a median income of $80,000 for a family of four, according to public-policy group Demos.

In 2000, 39 percent of middle class families, or about 12 million, qualified as solidly middle class based on five key measures of financial health: assets, education, costs of housing, money in the bank after expenses, and health-insurance coverage.

That percentage has been falling ever since.

In 2006, the figure plunged to 8 million, the report states. Now, in an eye-popping new estimate for 2008, Demos projects another 4 million middle class families are in danger of sliding into poverty.

Families who were frantically patching together a middle class life with both mom and dad in the workforce, using credit cards to cover unexpected bills, home equity as an ATM and a prayer, have run out of buffers against financial calamity.

In an April report from McKinsey Quarterly, 90 percent of the respondents have cut back spending this year, with a full one-third saying their belt-tightening was “significant.” Consumer spending accounts for 70 percent of GDP, and economists say this does not bode well for an economic rebound in the immediate future.

“People’s position now is even worse off: they don’t have their home equity to tap into, and stocks and 401(k) values have declined so dramatically, it’s really destabilizing people,” said Jennifer Wheary, a senior fellow at Demos.

Here’s what middle-class families are facing now:

* Spiraling debt burdens: Lower- and middle-income families devoted 20 percent of their income to credit card debt in 2004, and Demos estimates that jumped to 25 percent last year.

Today’s median earners actually spend 18 to 32 percent less on clothes and food than their parents did, according to Congressional testimony by credit expert Elizabeth Warren in 2007.

They are walloped by increases of more than 70 percent for health insurance and mortgages. Demos estimates 75 percent of cardholders use credit for basic and extraordinary expenses.

* Falling asset values: Households with mortgages have an average equity of only 20 percent, according to Web site Calculated Risk.com, a record low that erases a backup source of funds for the cash-strapped middle class.

* Spiking unemployment: The official unemployment rate hit 9.5 percent, the highest in 26 years, and many experts say the true rate is approaching 20 percent when under-employed and discouraged workers are included. Most middle-class families have no cushion to ride out job loss – Demos estimates 76 percent lacked the assets to cover three-quarters of basic expenses for three months, even before the recession hit.

Economists are sounding alarms because a healthy middle class is crucial for a healthy economy. Middle-class workers – especially the small business owners who serve as the economy’s backbone and pay taxes as individuals – contribute billions to federal and state coffers.

“Without a strong middle class, the dream of a sustained economic recovery will turn out to be just that, a dream,” said Christian Weller, a senior economist at the Center for American Progress.