The National Bureau of Economic Research concluded that the "Great Recession," which began in December 2007, ended more than four years ago. Small comfort, as we still are experiencing many effects from the longest and deepest economic downturn since the Great Depression of the 1930s.
A new study by leading researchers in the Annals of the American Academy of Political and Social Science documents the calamitous toll the recession has taken on our economic lives, our retirement security, our politics, our trust in government, our children's opportunities and our health. The findings are clear: for millions, the recession's bite will last through their working lives and even into retirement.
In the "good old days," Washington would have tried to soothe our lingering economic pains. But now, Congress's dysfunction -- particularly its preoccupation with slashing the federal deficit -- is prolonging our collective pain.
Take jobs. As Harvard's Richard Freeman writes in the Annals, employment fell more sharply and for longer during the Great Recession than at any time since World War II and our return to anything like full employment is painfully slow. It will take more than five years for the unemployment rate to fall to pre-recession levels. A larger federal stimulus would have created more jobs and boosted economic growth, but such policy proposals can't get a fair hearing in Washington's "no-compromise" political environment.
Most Americans have suffered: about a fifth lost jobs at some point, a quarter lost more than 75 percent of their wealth and home prices remain almost 30 percent below their 2006 high. Only the stock markets have recovered the ground lost during the recession. And because most financial assets are owned by the wealthy, the recession widened the already-large income and wealth gaps between the rich and the middle class and between whites and blacks and Hispanics.
Moreover, we still haven't seen some the recession's most harmful effects because they will occur over the long run. Many unemployed workers used their retirement savings to make mortgage and car payments. According to Boston College's Alicia Munnell, they won't be able to maintain their standard of living when they retire. This is particularly true for older workers who have few working years left to restock their savings.
Children whose parents lost jobs and homes face threats to their future opportunities. According to Chicago's Ariel Kalil, many will develop behavior problems or repeat a grade and will be less likely to graduate from high school or attend college as a result of their parents' financial troubles.
An unbiased examination of the effects of the Great Recession does reveal some benefits: enrollment in higher education increased across all socio-economic groups, for example (in part because the federal stimulus expanded Pell Grants for needy students), and mortality rates fell because lower air pollution, less tobacco use and fewer people driving to work lowered generalized health risk.
Overall, the Great Recession's costs have been massive. They would have been much larger had the federal government's fiscal and monetary policies not calmed the financial panic and kept the U.S. and the world economies from tumbling over the precipice. We avoided another Great Depression because the fiscal stimulus and other policies worked. Paradoxically, though, as Princeton's Alan Blinder writes in the Annals, the fiscal stimulus is more reviled than admired; the government's success in averting much worse outcomes was falsely labeled a failure. Instead of relief at the disaster averted, we witnessed the rise of austerity politics, which bears much of the blame for our ongoing economic malaise.
Millions of workers and families have yet to regain the ground lost over the last six years. But absent a government willing to address high unemployment and inequality of opportunity, the "lost decade" of economic progress in the 21st century is on track to last for a second decade.