The end of this road, which is not far off — barring a very dramatic change in political sentiment — will be bankruptcy and social collapse, as has happened in every nation and empire from the beginning of human history that has tried to borrow itself into prosperity.
The record is becoming clearer and clearer: The Great Recession and its persistent aftermath have dealt the American middle class a blow from which it may take a generation to recover. For the last decade, household incomes have been declining steadily, according to a new report by Sentier Research, a respected Washington-area think tank.
Much of the damage has been done since the official end of the Great Recession. From June 2009 to June 2012, median household income fell 4.8 percent, to just under $51,000. This represents a continuation of the middle-class hollowing out that has been underway since the beginning of the last decade. The Great Recession itself caused median household income to decline by 2.6 percent, and since January 2000, when it stood at more than $55,000, household income has declined by 8.1 percent.
Worse still is the two decades-old erosion of median net worth. American households’ net worth has declined from an all-time 2007 high of $126,400 to a mere $77,300 only three years later — roughly what it was all the way back in 1992, at the beginning of the ‘90s tech stock boom. In other words, America has lost an entire generation’s worth of economic growth courtesy of the Great Recession, and isn’t likely to regain it in the foreseeable future.
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