Here’s the good news: Getting slapped around by two generational recessions within a span of 15 years gives us quite a lot of data and conclusions to try and understand what the longer-term effects of a nation being (and feeling) broke could be.
But here’s the bad news: Lessons from 2008 mean the projections are even bleaker this time around.
You wouldn’t know it from the jobs report that Donald Trump and his Wall Street-obsessed cronies in D.C. are all stroking their egos with. But a new analysis from the Congressional Budget Office suggests that despite a surprising economic bounce back, the long haul is still going to be an extremely bumpy ride. Business groups and Republican leaders are soaring high off the news of storefronts re-opening around the country. The CBO, meanwhile, warns that it could be a reprise of the post-Great Recession landscape.
This probably makes intuitive sense for anyone who is reading news about the economic “recovery” while staring at their bank accounts crumbling under the weight of rent, college loans, car payments and medical bills. By conventional metrics, the 2008 recession only lasted 18 months. Yet we still haven’t fully recovered from that recession, and there are too many stories of people who have been drop-kicked by the COVID recession after a decade of trying to crawl out of the previous one.
The equation is, unfortunately, dead simple. “Slower growth means higher unemployment, lower wages and less income for people. What we are looking at is another decade of that,” Adam Ozimek, chief economist at Upwork, told the Washington Post.
What can we take away from the last decade we lost to a brutally slow economic recovery?
Nest eggs cracked. People with the most debt couldn’t figure it out. Mass foreclosures and insolvency unfolded. Many found themselves working for lower wages, or taking fewer hours, against their will (and needs). The conditions fueled the rise of the gig economy, which we now see is starving workers with inadequate wages and hidden costs of employment, even as the corporations who hire them receive stupefying valuations on Wall Street. Young people found themselves having to change course in careers, or facing long years without the potential for upward mobility they anticipated. It prevented people from buying homes, having children and securing “other markers of stable, adult life,” as one Wharton report concludes.
This is a lot of shitty news, but there remains an obvious, gleaming silver lining: Improving the fiscal and monetary response on a federal level would aid the recovery. The CBO report acknowledges this, but the lessons we’ve taken from the Great Recession are still being ignored by too many people in Congress. Republicans pushed back against every extra dollar being proposed for the 2009 stimulus package, even when more money could have made a lasting impact on infrastructure and jobs creation. They continue to do so today, with Senate Majority Leader Mitch McConnell suggesting that his party will not greenlight more stimulus checks and will toe the line on other big economic packages.
But again, working people need more help to actually make it out of the slump, regardless of how Wall Street is behaving. And given that the average American carries more than $38,000 in debt, with the hardest consequences landing on households that are already falling into poverty, it’s becoming clearer that debt forgiveness on a variety of levels is necessary to protect not just the GDP, but actual American lives.
This would, in part, address systemic issues, too — like how Black students hold the most federal student loan debt — while helping people immediately divert their cash into savings and spending on actual goods rather than being stuck in the financial equivalent of throwing water out of a sinking boat. Canceling student debt in particular is easier than it may sound, with outsized impacts on national economic productivity. Plus, given the dramatic ways that all kinds of debt fucks with our lives and mental health, finding ways to relieve the pressure may be a bigger priority now, during a pandemic, than ever before.
Unfortunately, there’s no way such legislation will pass without some sort of protracted fight on the Senate floor, no matter how large the upside. The sparkling jobs report and good economic news is giving ammunition for McConnell and others to declare that America can pull itself up now. No matter that modern recessions are hurting women and communities of color the most, nor that large corporations were the real winners of the bailout at taxpayers’ expense.
The American dream is supposed to be about personal prosperity, and how that prosperity can grow and boost future generations to greater heights. We all know the adage about standing on the shoulders of giants. Instead, those giants have been tripping over their feet for a long time, and now it feels like we’re falling head-first into the metaphoric concrete, straight into a concussion.
Canceling debt and allowing average Americans to invest into their futures is an aggressive game plan that could help us catch ourselves, mid-fall. It would show America that bold bipartisan answers, not just half-measures, are possible during a national crisis. It could stabilize a young generation before it finds itself lost in the weeds, like millennials did.
Our leaders’ inability to pursue such a solution, however, makes it feel like 2009 all over again.
Eddie Kim
Eddie Kim is a features writer based in Los Angeles, covering social and cultural issues for MEL.
