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Biggest Debt Bomb in History

America's Suffering Middle Class, Still Worse Off than 2008

Politics / Social Issues Feb 13, 2013 - 02:37 PM GMT

By: Money_Morning

Politics

David Zeiler writes: The government's numbers - primarily the monthly data on unemployment and inflation - tell the story of a slow but gradual recovery by the U.S. economy.

But the experience of millions of Americans tells a far different story.

According to a new national survey conducted by the John J. Heldrich Center for Workforce Development at Rutgers University, many Americans continue to suffer from the impact of the Great Recession.


What's more, more than half of those surveyed believe the U.S. economy will not fully recover for another six years, and nearly one-third said the U.S. economy will never fully recover.

"Millions of households were affected to some extent by the layoffs that occurred four years ago," Mark Szeltner, the lead researcher for the Rutgers survey, told The Daily Ticker.

The Rutgers survey backs up what some other surveys have said.

Last August, in a Pew Research survey of middle-class Americans, 42% said they were worse off than they were in 2008.

A Rasmussen survey taken earlier this month showed that only 39% believed the U.S. economy would be stronger in five years - the first time, Rasmussen said, that figure had ever dipped below 40%.

U.S. Economy 2013: Rhetoric and Realities
The survey results contradict the sunny rhetoric from the party in power in Washington.

For the past couple of years, Democratic lawmakers and U.S. President Barack Obama have pointed to a slowly dropping unemployment rate and gradually improving housing data as evidence the U.S. economy was on the mend, if not back to its pre-2008 form.

"Our economy right now is headed in the right direction and it will stay that way as long as there aren't any more self-inflicted wounds coming out of Washington," President Obama told reporters last week as he urged Congress to act to avoid the economically damaging budget cuts set to hit March 1.

And just going by the government data, the U.S. economy is better off than it was in 2009.

Unemployment is at 7.9%, down from its peak of 10%. The gross domestic product (GDP) grew 2.1% in 2012, while it shrank 3.5% in 2009.

Unfortunately, the improving government data hasn't done much to help many middle-class Americans recover from the worst setback to the U.S. economy since the Great Depression.

The Rutgers survey of nearly 1,100 Americans showed just how deeply felt the Great Recession has been.

Nearly a quarter, 23%, said they lost their job as a result of the recession. Nearly three in four - 73% -- said they had either lost a job themselves, had a family member lose a job or had a close friend lose a job.

While most of those who were laid off said they had found new jobs, only a minority found jobs comparable to the ones they lost.

More than half (54%) said their new job paid less than their old one, and in many cases the pay cuts were steep. More than a quarter (26%) of those who took pay cuts lost between 31% and 50% and 18% lost between 21% and 30% of their former salaries.

"[That] can be a huge hit for middle-class Americans," Szeltner said.

Equally demoralizing is that many of the "recovery jobs" carried a lower status. Almost half (48%) said their new job was a "step down" for them.

And people are pessimistic about any real improvement to the unemployment picture, mirroring how they feel about the U.S. economy in general.

An astonishing 90% said they were either "somewhat concerned" or "very concerned" about the job market for those now looking for work, and 85% said were somewhat concerned or very concerned about their own job security.

And the survey showed many feel this is the new normal; 60% said the changes to the U.S. economy are permanent.

Large numbers said they believed many things are gone for good: workers feeling secure in their jobs (43%); the availability of good jobs at good pay for those who want to work (34%); and a lower unemployment rate (29%).

Great Recession Impact on U.S. Families
The survey also revealed some of the hardships suffered by U.S. families in the wake of the Great Recession.

More than one-third (35%) said the recession has had a "major" impact on their family; only 14% said it has had no impact.

Some of the ways diminished economic circumstances have affected Americans, especially those who lost their jobs, include:

■66% dipped into savings set aside for other things;
■57% cut back on doctor's visits or medical treatment;
■40% borrowed money from friends or family;
■37% increased credit card debt.

Most of those who were laid off - 61% - believe their finances will never recover.

"I think the data speaks to the scope, the magnitude and the persistence of the recession," Szeltner said. "It's a really depressing image of what's happening right now to many Americans."

How about you? Do you think the official U.S. government statistics are masking serious issues with the U.S. economy? Tell us what you think in the comments section below.

Source :http://moneymorning.com/2013/02/12/u-s-economy-recovery-doesnt-fool-struggling-americans/

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Biggest Debt Bomb in History