WSJ: Inside the Disappointing Comeback (due to household debt)

[alp227]

"Inside the Disappointing Comeback" by Jon Hilsenrath and Conor Dougherty

Two years ago, officials said, the worst recession since the Great Depression ended. The stumbling recovery has also proven to be the worst since the economic disaster of the 1930s.

Across a wide range of measures—employment growth, unemployment levels, bank lending, economic output, income growth, home prices and household expectations for financial well-being—the economy's improvement since the recession's end in June 2009 has been the worst, or one of the worst, since the government started tracking these trends after World War II.

In some ways the recovery is much like the 1991 and 2001 post-recession periods: All three are marked by gradual output growth rather than sharp snap-backs typical of earlier recoveries. But this recovery may remain lackluster for years, many economists say, because of heavy household debt, a financial system still damaged by the mortgage crisis, fragile confidence and a government with few good options for supporting growth.

There are bright spots. Exports, particularly of manufactured and agricultural goods, are improving, in part because of booming developing-country economies and the weaker dollar. They are expected to pick up in the second half of the year as the temporary shock fades from Japan's earthquake and tsunami. In a hint of this, the Institute of Supply Management on Friday reported an uptick in manufacturing for June. Higher corporate profits, stock prices and business investment also are supporting the expansion.

(more at link)

[AndyTiedye]

1. …(Due to Repig Obstructionism)

would be more accurate, but don't expect that from the wall street urinal
(either pre-Murdoch or now).

[DJ13]

2. Corporations were bailed out because they had excessive debt

Its too bad the government didnt promote a plan to bail out consumers with excessive debt.

If they had consumer spending wouldnt remain depressed.

[Liberal_Stalwart71]

4. There were many consumer protection proposals that were backed in the House, but

stalled in the Senate via Republican obstruction and Blue Dog/DLC complicity!

[AtheistCrusader]

3. If the average household is like me...

high unemployment makes people who even have jobs, gun-shy about holding debt. We pay down everything, and as fast as possible. Without that money in circulation, it puts everything in a tailspin that only drives more unempoloyment.

[AnneD]

5. Same here.....

I was recently RIFFED then unRIFFED. It was about 27 days of anguish. While we had very little risk in the form of debt, I had prepared our budget during this time. Many cuts I made will stay and we will reduce the little debt we do have before the year is out.

[Mad Machinist]

6. When you have many people

using credit cards to simply buy food to feed their families, this is what you get. We, her ein the U.S., have the mentality that we have to keep up with the Smith's and Jones's. We have to have the best of everything. And with the current mentality towards creating small business, we get to where we are now.