Just In Case You Wondered . . . .
Some years ago a famous American asked: “Are you better off than you were four years ago?” And from what I can gather, lots of folks are asking that same question today.
Well, now we have the answer to that question. Unless you received a major promotion at work – and maybe not even then – in general, you are not. Nor are you better off than you were when the recession “ended” three years ago, either.
In fact, you’re relatively worse off when today is compared to three years ago than you were comparing three years ago to the beginning of the current recession.
Here’s the background. The current economic hard times began with an 18-month recession: from Dec 2007 to June 2009. But the “recovery” (yes, in technical terms there has been one, though it’s been essentially a jobless recovery) has actually hit people much harder than did the recession. From the cited article:
Median household income fell 4.8 percent on an inflation- adjusted basis since the recession ended in June 2009, more than the 2.6 percent drop during the 18-month contraction, the research firm’s Gordon Green and John Coder wrote in a report today. Household income is 7.2 percent below the December 2007 level, the former Census Bureau economic statisticians wrote. (emphasis added)
Let that sink in for a minute. During the 18-month recession, in real terms the average household lost 2.6% of of their income. But during the 36-month “recovery” since, in real terms the average household lost 4.8% of their income – close to twice as much.
I’m no economist, so I can’t offer an expert’s perspective on how to fix things. But it doesn’t take a rocket scientist to figure out that whatever we’re doing today is making things worse vice better; the raw numbers show that very clearly. Other recessions in our history have shown a clear economic recovery – well, whenever sane economic policy was used, that is. Here, not so much.
However, as a layman I’ll offer two observations. First, it seems that if the government is soaking up much of the available capital through deficit spending, that just might be a drag on the economy. If the government is borrowing that much, that same capital isn’t available for businesses to use in creating new jobs.
And second: I’m pretty sure this isn’t exactly the “change” most people were hoping for in late 2008. I think they wanted things to get better, not worse.
Racist.
Teddy996 is right. The facts are just a convenient smokescreen for racism. Next you’ll be claiming that Joe Biden is a blithering idiot and raging moron when the reality is that you are not only racist but opposed to equal opportunity for the mentally disabled!
That’s probably the laziest comment ever teddy. And the funniest.
C’mon, guys. If you’re gonna call me out as “racist” for quoting published statistics, do it right:
(smile)
Watching all this nonsense is particularly disturbing to those of us old enough to clearly remember past economic booms. Eh, real ones, that is. Back when the gubmint wasn’t intruding in every aspect of individual and corporate life.
Doesn’t matter if it is an individual, a corporation, or some political subdivision – the first thing to do when debt is a problem is to stop spending. Nothing will fix debt until that happens. And it only gets worse by putting off what is obvious to every sane human being on the planet.
Bingo, OWB. My military service started under Carter – and I remember the Carter “stagflation” and it’s lingering effects (until 1982 or 83) quite well. But we didn’t learn our lesson then, and haven’t yet.
Winwood got it right during the Nixon administration:
The percentage you’re paying is too high priced
While you’re living beyond all your means
And the man in the suit has just bought a new car
From the profit he’s made on your dreams
We keep ignoring the obvious. But eventually, we still have to pay the piper – one way or another.
We all know what is going on: He is overloading the SYSTEM in order to REDISTRIBUTE the Nation’s wealth. When the designed economic crash comes … so does the do over … and all will share in what is left over. Period.
But we the people will not let that happen. General Election is around the corner.
Dunno about that, MCPO. It’s also possible that many in the current administration actually believe the Progressive (AKA Socialistic) economic BS they’re pushing will really work. History says otherwise, but hey – what does history know?
Never attribute to malice that which can be satisfactorily explained by incompetence.
I’m significantly better off than I was three years ago, though it has zero to do with whom the president is. It also will be irrelevant whom the president is for the next four years as either way this country will continue to sink, and sink, and sink. It’s not the man on top that is the issue, it’s the giant fucking divide between the two party monopoly on our government that kills us.
IMHO, H. Ross Perot had a pretty good handle on what was wrong.
Sgt Awesome: a few are better off; most are not.
Further: history argues against your point – we’ve had a highly partisan, 2-party system throughout virtually all of hour history. We’ve always had an up-and-down, cyclic economy too. But recoveries typically happen fairly soon after the lows. That hasn’t happened in this case.
The difference in this case is IMO the application (or lack thereof) of economic common sense. Frankly, that’s been relatively rare since probably the Kennedy administration – though the years 1996-2000, when we had a split government (Dem POTUS, GOP Congress) might have come close, as well as maybe the first year or two of the Nixon administration (1969-1970). I can’t really even give Reagan particularly good marks there, since he managed to allow huge increases in the Federal debt – and allowed structural problems to persist that may well bankrupt us in the long run (e.g., the “Social Security Reform” that really wasn’t).
In short: politics isn’t the problem. The problem is that we’ve been living beyond our means for somewhere close to 50 years, and we don’t seem to realize it. But the “bill” for our collectively “living large” is still out there – and must one day be paid.
“In short: politics isn’t the problem.” I agree. It’s the politicians that are the problem.
“The problem is that we’ve been living beyond our means for somewhere close to 50 years, and we don’t seem to realize it.”
Truer words have seldom been spoken, Hondo.
I feel fortunate that I own my car and my home, do not have a mortgage, and have a strict budget that leaves me with a little extra at the end of each month for treats. However, I see too many people not getting the idea that they have to do this if they want to stay solvent.
I just hope that the right people get elected and do what is necessary to get this country back on track, because something has to keep us from going off the financial cliff that the CBO has been talking about. The director of the CBO has a blog where his reports are published, and can be printed out for easier reading.
2-17 AirCav: I disagree.
The American electorate by and large keeps electing the same folks to serve in DC. At some point, the fault no longer lies with the fools serving in DC. Rather, it lies with the fools who keep sending them back to DC – and demanding more “free stuff for everyone”.
TANSTAFL. One way or another, the American public is going to re-learn the truth of that statement.
Actually, stimulus wasn’t large enough and it didn’t have enough for STATE employees (you know, police, firemen, teachers). So while there is a recovery on Wall Street (they’re back to where they were before the recession), there is no recovery for Main Street. At least when Reagan did his stimulus, he did provide money from the Federal government to the states to keep state employees on the books which cushioned and spread the money around locally. The GOP has prevented that, look at the Red States, loss of state workers has hurt their economies, which is a ton of money that would be circulation in the states, which have a requirement that budgets be balanced (which is hard to do coming out of a recession).
IF there were not deficit spending by the US Government, you’d be in the SS and singing Horst Wessel Lieb.
But, economics, labor history, economic history is not taught to most Americans. Not to mention monetary policy and what the Fed does. How many people here want the Gold Standard? Thought so.
Gee, ex AF – the $787 billion “stimulus” under the present Administration was approved in Feb 2009. And as I recall, it’s been dispensed pretty much as required by law since. Please enlighten me as to how the GOP prevented anything.
The plain fact of the matter is that the current Administration’s economic policies simply haven’t worked worth a damn – just like FDRs didn’t work worth a damn in the 1930s, and Carter’s didn’t work worth a damn in the late 1970s. In fact, since the “recovery” began in June 2009 the average American family has lost ground in economic terms at roughly the same pace as they did during the Dec 2007 – Jun 2009 recession. See the above article and the cited references for details.
The current Administration’s policies are based on the same-old, same-old Keynesian economics that have historically failed. Even Morgenthau admitted the didn’t work in 1939 – after they’d been tried for over 6 years and had failed to substantially improve the US economy during the Great Depression.
Recommend you quit drinking the progressive Kool-Aid. When the effect wears off, try (1) observing reality and (2) thinking for yourself. It will be difficult at first, but you’ll find it’s rather rewarding once the shock of realizing you’ve been lied to for decades wears off.
Addendum: documentation that the “stimuls” was largely spent as planned and did not produce anything like what it was projected to do.
http://useconomy.about.com/od/candidatesandtheeconomy/a/Obama_Stimulus.htm
When something isn’t working at all, only a fool throws good money after bad.
We are so close to the $16 trillion mark that it should be reached before Monday, in addition to the $1.1 trillion budget deficit.
“The nonpartisan Congressional Budget Office said today that scheduled tax increases and spending cuts in 2013 would reverse the modest economic recovery. Economic output would shrink next year by 0.5 percent, joblessness would climb to about 9 percent with “economic conditions in 2013 that will probably be considered a recession,” the agency said in a biannual report on the budget and economic outlook.
It would be the fourth consecutive year the U.S. would run a trillion-dollar budget deficit. The budget office forecasts U.S. debt will total 73 percent of the nation’s gross domestic product this year. That would be the highest level since 1950 and about twice as large as five years ago, before the most recent recession, CBO said.” — Bloomberg – 8/22/2012
And for the record, AF–a lot of the money in question DID go to states in form of teachers, firefighters, etc., but now that the sugar tit has dried/is drying up, now the states are feeling the pain they SHOULD have felt 3-4 years ago.
All the stimulus did was string out the junkie just that much longer.