Economy Still Ailing, "Tremendous Amount Of Hurt" To Come

A new analysis by the Economic Policy Institute finds that despite positive signs of the recession leveling off, folks should not be too heartened by talk of "green shoots."

EPI president and report author Larry Mishel told the Huffington Post that there will still be "high and prolonged unemployment that's going to have a tremendous amount of hurt."

Mishel pointed out that fears that, without a stimulus package, unemployment would reach almost 10 percent have become reality -- even though the $787 billion package is in place. "What was likely to occur without the stimulus is likely to occur with the stimulus," he said.

Mishel's slideshow presentation shows that although the current downturn started at a lower unemployment rate than those past, it has seen a faster increase in job losses and unemployment. While unemployment rose 3.6 percent in 16 months during the 1980s recession, the current recession has featured a four percent jump in the same amount of time.

"Given what is ahead, it is not clear how families will be able to survive this prolonged and deep recession," the report says. "We cannot act as if these are normal times, and we must find ways to provide relief. After all, not everybody receives unemployment insurance (which eventually runs out anyway), there are no significant safety nets for men, and Temporary Assistance for Needy Families (TANF) is weak and time-limited. We will definitely need to provide more stimulus in order to reduce unemployment and provide public service employment in hard hit areas."

A report released May 9 by the Center for Economic and Policy Research found that the stimulus package would be severely blunted by unexpectedly large state budget shortfalls. That report also called for additional stimulus.

Mishel noted that unemployment and underemployment do not account for stagnant wages, a significant drag.

"This issue is not behind us," Mishel said. "We still have to deal with the fact that there's going to be a lot of people who are going to be really struggling to get by, especially low-income, minority communities, but really tons of people."

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Comments

[Ron]

The Great Bush Depression has already put this country in a downward spiral.

[CraziesAreRunningTheShow]

Solution to all problems...

Make all jobs government jobs. We will all have food, shelter and clothing and the rich or politically connected will take great care of us all.

Hmmmmmmmmm didn't they try that somewhere with lousy results?

[research]

So plutocracy is better than Democracy?

If you say you want neither, you must provide an alternative.

[Rmath]

Applying "tax cuts" to today's problems is like giving smelling salts to the dead. How absurd that people are still slinging the same old crap.

[confidance government]

Actually the solution is to end the Federal Reserve's manipulation of the interest rate of the dollar that caused the recent housing bubble.

The small percentage differences we see in taxes and spending each year have a small effect when you compare that with power of changing interest rates.

[ramal]

Duh! I think a child could see what is coming down the pike.

[Mildmannered]

We need to get the entire stimulus package into the economy immediately. And we need to be working on a second stimulus package.

(The federal stimulus is being undone in part by severe cutbacks at the state and local levels, California being a prime example.)

[Rule Of Law]

Gosh, and the poster ColdheartedOrb was saying just last week that the recession/depression is over--Party on, Dudes! Where's my buddy now when this info hits the fan? And what bank do you work for, trole?

[totaldisbelief]

we are involved in a paradigm shift. the changes are not going to be easy or pleasant for most people.
I think it will be very hard for society ,government and industry to get a grip on it let alone get ahead of it.
The possibility for a much better world does exist; but we as a species drag around all our imperfections (like greed the one thing that basically got us where we are today) with us.

[liberalbug]

Not only is unemployment a huge issue, but the people that support this economy and are paying for all this stimulus (the middle class) simply are not getting ahead and have not been getting ahead for years. Those that are still lucky enough to have jobs are having to accept furloughs, wage and hour reductions, and increased health insurance costs, concessions that likely will not be restored. Meanwhile, nothing is getting cheaper and we all still need to feed ourselves and our families. So, it is like trying to walk up a sand hill. For every step forward, american families slide two steps back. Even when the economy "recovers," most of us will be sufficiently far behind that it will be a long time before we as individuals even begin to "recover."

[senorlou]

I know that feeling. We can't borrow our way out of this mess. Bill's due and we have to pay. The only good thing that might come out of this, if we are to dodge a catastrophe, will be if we make changes to the financial system in this country. The last 8 years have lowered our standard of living, and we're going to have to deal with that from now on. Turns out we aren't as rich as some of us thought we were.

[senorlou]

I remember Obama saying something about how we need more doctors, teachers, nurses, scientists, and engineers than we need bankers and Wall St. brokers. He's right. The financial "industry" is a drain, for the most part. Let's shrink it way, way down. Let's break up these massive banks so they are big enough to fail. You've got public risk and private profit, and that doesn't work at all. Reality will trump fantasy every time. People have to learn that there is more to life than being rich and greedy, and it's not OK to be that way. If we go on with the same system, we'll get the same results.

[Over40]

Very good comment.

[cruisepuppy7452a]

His Teach For America will only create more out of work, seasoned teachers. That isn't a solution, its not moving forward, its a move backwards. We need teachers who are use to dealing with problem kids, who understand that not every kid fits into a square peg, needs special classes, or work, gets bored if they are ahead of the pack. His idea falls short and will in the end cost us more and our kids more, as they wont have the education to get ahead of this mess. We need all the help we can get to get out of this hell hole. Teach for America is penny wise and pound foolish, it won't make our people smarter, will cost us out the ass in the end., its something we cannot afford. Yes, we do need docs, nurses, and they could be utilized in clinics with supervision to treat those without healthcare, but nobody wants to do it. Talk is cheap, my ideas make sense, are cost effective and would aide millions in need.

[flossophy]

Too bad this administration doesn't understand the concept "tax cuts".

Bush pulled us out of the 2000-2001 recession by indicating to the business community (aka the economic engine) that they'd be able to keep more of what they earn, to reinvest into the economy so it can grow.

Instead this administration has been dithering on fixing the banking crisis... and not being clear on where they want to go in terms of economic policy.... Which is essentially repeating the mistakes of FDR. When the economy can't predict what the government will do, they sit on their hands. And meanwhile the world's economies falter.

Way to go! Hope! Change!

[senorlou]

Bush walked in to a $5.7 trillion national debt and a BUDGET SURPLUS for 2001 of $150 billion.

Bush walked out with a $12 trillion national debt and a BUDGET DEFICIT of way over $1.3 trillion - probably more like $2 trillion.

Bush didn't pull us out of anything other than peace and prosperity. How you can continue to live in denial after the past 8 years is really a shame. It's a shame when people can't admit they were wrong about something so obvious and undeniable. We are cleaning up a massive Republican mess left by the biggest arch criminals in US history - G W Bush and Dick Cheney and all their cronies. Cheney just got popped for a conflict of interest. Turns out he had an $85 million investment with a bunch of for-profit private prison companies. He made bucks off jailing his own people. Apparently, his administration gave all kinds of multi-million $ contracts to them. That's the kind of leadership we just had for 8 years. This all happened because a bunch of people got fooled into wrecking their own country by voting for a bunch of criminals. Maybe you'll believe me when you see them on trial for torture and corruption. It's going to happen. Will you stand by them then as well?

[flossophy]

look at the economic figures for the last 8 years... the numbers don't lie.

[rockthedeacon]

Have you really thought carefully about what you've said in your post, or do you just like Republican talking points? OK, so you believe in the old trickle down theory, or some derivative. You do know the recession developed under Bush's watch, right? The housing boom/bust occurred under Bush's watch. Industry and jobs fled the country at an even more rapid pace under Bush. Countless indicators demonstrated we were headed to where we are now. Look at the numbers: Average number of jobs created under Bush dropped precipitously from 2001 - 2008. Five million more Americans in poverty. Total consumer debt almost doubled from 2001 - 2008. Real GDP growth went from 4.09% in 2001 to 2.65% in 2008. US trade deficit doubled in the same period. I could go on and on, but suffice to say you need to educate yourself about the Bush era before you write stuff like this.

[flossophy]

This economic crisis was a result of democrat policy and democrat run institutions, Fannie & Freddie.

Bush tried to regulate them multiple times, but the Dems blocked it on party-line votes.

[zelda777]

Exactly how are "tax cuts" supposed to help millions of people who don't even have a paycheck, or maybe a home, to tax????? That is such childish blather.

[flossophy]

The idea is to allow small business to keep more of the money they earn so they can afford to hire those millions of people you care so much about.

[confidance government]

Government is here to ensure your rights not your income security.

[escribacat]

The administration understands the concept of tax cuts a lot better than you do.

[Cuneo]

Thank God for Republicans offering up heaping helpings of the same policies that cause the current depression as a solution. As I don't really have any hope that the economy can recover without the complete end of Republican input into the matter, I almost wish that the Republicans were currently allowed to completely extinguish economic growth so that I would at least be able to enjoy the spectacle of the GOP disappearing totally and having to rebirth itself under another name.

[barackobama4prez]

well you can't go the better of 2 decades using the boom and bust strategy, not planning for our future, and then not expect pain. We will pay for our collective sins now and hopefully set our future up so our kids don't have to pay for our sins later.

[vippy]

What sins did we commit. We had nothing to do with this mess. Someone had planned it within the Bush 8 years or even longer and got away with a lot of money. Now, again, we are called upon to bail them out. Seems to me, every couple of years they do the same thing and we don't get any smarter and keep voting for the same representatives regardless. Vote them all out, regardless of party, all incumbents, after 4 years vote them out again and we will see some changes. But that won't happen.
I want to live like a European and nothing less. All this brainwashing that America is Number One
has been a lie. One works and works and never gets anywhere, and in the end retirement gone too and you call that a sin?

[barackobama4prez]

our collective sin was that we failed to keep dubya out of the W.H., TWICE.

[flossophy]

Our kids and grandkids are already going to be paying off this 'stimulus'... That's the problem.

We're essentially taxing the unborn to pay for these big government programs. And judging from history... it won't work.

[AmandaBC]

"We're essentially taxing the unborn to pay for these big government programs."

Let me guess, it was all fine and dandy when your hero GWB was borrowing and spending gazillions on shiny toys to ki.ll non-white, non-christian women and children...

[Cuneo]

There will be no economic future for the bottom 70% of the income strata until a much more massive stimulus is enacted. We can simply sit around and wait for this to become crystal clear, or do it now. We will probably just sit and wait a bit longer as the economy, employment, life expectancy, and all other measurements fall precipitously before the Senate allows a true recovery to begin. I envy the young as they will be able to survive it and prosper in their forties. For those over fifty this is probably the new normal unless they live into their 70's.

All due to the stupidity of a generation of rubes enthralled by a supposedly conservative economic policy that can only offer up policies that will lead to further economic contraction as a remedy.

[bynddrvn5]

Green shoots, like what? The only things that are booming right now are Pawnshops, repo companies, debt consolidation/repair companies, and bankruptcy lawyers. This is a sign of a recovery?! I don't think so.

With subprime loans going bad again, after being adjusted and Option ARMs adjusting this year - we are only looking at the top of the Iceberg. When these loans adjust many homeowners simply will not be able to pay their monthly loan payment, repayment was unlikely when these loans were originated and almost laughable in an economy where employers are cutting staff, hours, and salaries. I think what we are currently seeing in the market is that homeowners are WAY TOO optimistic about how much the government can lower their payments. The next year or two, will be rough.

Also, I am very happy that this article pointed out that many unemployed people DO NOT get unemployment benefits, for example in most cases employees for NON PROFIT companies are NOT covered. Ironic, no?

[BurtonOerney]

Hopefully the fact that you're not the only one to realize that many people are having trouble with their mortgages can reassure you. I'm almost certain that the people who try to forecast economic conditions take that into account.

[AngelaQuattrano]

I doubt it. I heard economists talking yesterday about the recession being over, but things would be hard (read: unemployment and housing issues will continue to worsen) for the next 18 months. What I want to know is how the definition of the word "recession" can exclude the effects of the economy on the majority of Americans?

[ClarcKing]

This report/communication is important and must be broadcast continuously through the media and the population. Our political leadership is guilty of indifference to the survival of the population. The U.S. is in the middle of a monetary financial derivative debt based global economic collapse. The monetary debt based global economic engine is a killing machine; accelerating the contraction of the population's capacity to sustain itself. U.S. producers of milk, meat, and other foods are not getting enough money for their produce. Banks demand the closure of these food producing facilities if bills and payments are not met. A threat to the population as all out war. This lack of urgency in political and physical action will demand greater participation of the general population in directing the power of government. Put the Fed in bankruptcy, create the U.S. National Bank. Credits and currency will be issued into the population's physical economy. Jobs and purchasing power will be introduced into the economy. Stop the foreclosures. Enact the Homeowners and Bank Protection Act. Expand Social Security and Medicaid. Start construction of 100 fourth generation nuclear generation and distribution systems. Americans created the greatest and strongest national economy in the world. Our present crisis is reversible if we come to the realization that we have made a disastrous mistake in accepting the imperial system of economy: monetarism, speculation, usury, forced trade, perpetual war, outsourcing of jobs and industry; and return to the American System of economy.

[BurtonOerney]

The pitch man's credo: never say in one word what you can say in four.

[joebhed]

You had me there til you got to the 100 new nuclear power plants.

[senorlou]

I don't think the political leadership - not the same leadership that got us into this mess - is indifferent. I just think that we can only expect so much of them. Consider all that's happened in the past 8 years. We have lost trillions of dollars because of that horrible political leadership, and of course our "way of life". Spend, spend, spend and all on credit, of course. We can fix this, but it's going to take time. We will not ever get out of this mess, though, if people keep voting for those who have stolen all of their money. It looks like they won't be doing that for a while, but when things get better, Americans always fall for the GOP, get rich quick flim-flam from Wall St., and Real estate gimmicks.

[loncowber]

"U.S. producers of milk, meat, and other foods are not getting enough money for their produce. Banks demand the closure of these food producing facilities if bills and payments are not met."

Can you name one? I haven't seen anything regarding Kraft or Tyson or any other US food producers being forclosed. Seems like they are doing very well at the moment.

[Grannysue]

My job's gone the end of June, and I listed my house last month, trying to be proactive. But I will tell you there aren't very many jobs in my field out there and I haven't had one person look at my home. I'm holding my breath.

[senorlou]

Hang in there. A lot of us are in the same boat.

[Blenvid]

Well at least gas has gone up 40 cents in the past 3 weeks to contribute to the break of this recession. Wait a minute. They said they were raising prices because the recession was getting better. You mean they weren't being truthful?