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The U.S. Economy After The Great Recession

  • By
  • Sherle R. Schwenninger,
  • Samuel Sherraden,
  • New America Foundation
March 4, 2014
The bursting of the housing bubble in 2008 plunged the U.S. economy into a serious crisis, leaving American households with a huge debt overhang and the economy with a large gap in output and employment. This report reviews the economy’s deleveraging and recovery experience more than five years after the crash. It explores the following questions:  
  • How far has the economy come in the deleveraging process? Is private sector debt now at a sustainable level or do households and the financial sector continue to need to pay down debt?  
  • To what extent has the U.S.

Growth Must Deliver Or Policy Must Change

February 21, 2014
by Jay Pelosky

Stock and bond market volatility combined with data disappointments have brought the 2014 global growth recovery story to a fork in the road. Either growth delivers or policy reversals will be required. For investors and policy makers alike the bar has been raised.

Read the whole op-ed at The Financial Times.

Young Adults Experienced Financial Side Effects from the Great Recession

October 24, 2013
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Mounting debt, diminishing net worth, insufficient savings, increasing foreclosures, rising unemployment—all painful financial side effects of what has been dubbed the worst economic recession in almost a century. These side effects have been relatively well-documented. Rates of bankruptcy rose 74% and home foreclosures soared as much as 358% in some areas. Unemployment rates peaked at a national average of about 10%, with much higher rates documented for African Americans and Latinos. High rates of unemployment meant potentially fewer wages for day-to-day household needs. With only small amounts of savings or net worth to tide them over, millions of households turned to public assistance programs to sustain themselves. These effects are likely to follow households—and the children who grew up in these households during the Great Recession—for years to come.

Forget The Wealth Effect: It’s Time to Focus on The Income Effect to Understand the Sluggish Economy

October 1, 2013

by Peter W. Atwater

The “wealth effect” concept is remarkably simple: spending increases (decreases) as perceived wealth increases (decreases). When people perceive themselves to be richer, they spend more.

With the prices of stocks and bonds near all-time highs and home prices on the rebound, consumer spending should be on a tear. But it’s not -- much to the consternation of many economists, particularly those at the Federal Reserve. As a result, many believe the wealth effect is somehow broken.

"If the Recession Were a Bout of the Flu..."

July 23, 2013
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Obama is on the road this week to make a series of speeches across the country about the state of the economy and the American middle class. As Gigi Douban for Marketplace reports, many people have doubts that the President can do much of anything about the economy, due in part to the opposition he faces from Congressional Republicans.

Even if Congress and the President were working together in perfect harmony on this issue, the reality is that the economy is in a pretty bad way. As Heidi Shierholz with the Economic Policy Institute explains, we're technically four years post-Recession, but only "a fifth of the way out of the hole left by the Great Recession"  when one compares the share of the working-age population who has a job today compared with pre-recession. My colleague Rachel Black was quoted in yesterday's Atlanta Journal-Constituion in a similar vein:  “The recession made a big hole and it’s going to take a long time to fill it."

While I think the "hole" analogy is perfectly capable of encapsulating the severity of the Recession, Colin Gordon (a professor of history at the University of Iowa) has an effective and illustrative analogy about the Great Recession that I think adds a little something extra. As Gordon writes in a recent Dissent Magazine piece, "If the recession were a bout of the flu, we would be at about that point where the fever has broken—but we still feel like throwing up most of the time."

Financial Inclusion and Access within the Latino Immigrant Community

June 4, 2013

The National Council of La Raza (NCLR) hosted an event today to release “Latino Financial Access and Inclusion," a new report that examines the relationship between comprehensive immigration reform and household financial stability for U.S. Latinos. At the event, experts from NCLR, Citi, the American Bankers Association, and a Chicago-based organization, The Resurrection Project, explored the report's findings on financial inclusion within the Latino immigrant community. The report analyzes data from a survey of roughly 1,000 low-income Latino-identified individuals across California during 2012.

Janet Murguía, President of NCLR, began the event by discussing the historical exclusion Latino immigrants have faced in the mainstream financial services marketplace. Despite myriad barriers to accessing financial services and some significant economic challenges, this report found that Latino consumers were actively prioritizing saving, utilizing a range of financial products to meet their needs, and displaying savvy engagement with financial service providers.

The report also builds the case for comprehensive immigration reform and ensuring a path to citizenship by demonstrating the variance in financial stability and engagement by citizenship status. For example, among immigrants who had been in the U.S. the same amount of time, naturalized citizens were more likely to be engaged in the mainstream financial services sector than their non-citizen counterparts. As Murguía put it, U.S. citizenship opens the doors to not only better job opportunities and education, but also greater financial inclusion. When combined, these resources create a path to upward economic and social mobility. Thus, the report explicitly frames citizenship status as an asset and calls for the current immigration reform conversation to better reflect the economic needs and opportunities of the Latino immigrant community.

From Growth Compression to Reflation: The Road Ahead

November 28, 2012

by Jay Pelosky

This article originally appeared in The Huffington Post. View the original piece here.

How U.S. Can Once Again Define the Future

  • By
  • Patrick C. Doherty,
  • New America Foundation
November 27, 2012 |

Washington is all about the fiscal cliff these days. In Doha, Qatar, world leaders are negotiating over climate change. Federal debt and carbon emissions are indeed two big problems on the nation's front burner. But they are just the beginning.

As the fog of the election season lifts, America has a lot to worry about -- everything from competing economically with China to housing rapidly retiring baby boomers.

Economic Recovery and Social Investment

  • By Robert Kuttner, The American Prospect
November 26, 2012

Today’s prolonged economic slump is fundamentally different from an ordinary recession. In the aftermath of a severe financial collapse, an economy is at risk of succumbing to a prolonged deflationary undertow. With asset prices reduced, the financial system damaged, unemployment high, consumer demand depressed, and businesses reluctant to invest, the economy gets stuck well below its full employment potential.

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