Time to Panic About the Federal Debt Limit The Atlantic
Tom Gallagher, a political economist with the Scowcroft Group, likens the U.S. economy to an airplane with engine problems, just barely maintaining altitude above the tree line. Although the plane is holding its own, if almost anything else goes wrong, it will crash. Recent reports on initial unemployment claims show just how close to the treetops we are. Back in February, as The Fiscal Times pointed out last week, first-time claims had held at 400,000 or less for seven of nine consecutive weeks. Now the number has been running above 400,000 for 12 weeks. That is a pretty dramatic downshift that matches the uptick in the overall unemployment rate and the decline in the growth of the gross domestic product.
The Great Recession technically began after December 2007 and ended in June 2009; it was the longest recession in duration and the largest in terms of relative decline of GDP since the end of World War II. But polls show that many Americans believe that it's not over. A May 2011 study conducted by Northeastern University's Center for Labor Market Studies examined the GDP, employment, hourly earnings, and productivity data and found why so many people feel that way. The 23-page report, "The 'Jobless and Wageless' Recovery From the Great Recession of 2007-2009: The Magnitude and Sources of Economic Growth Through 2011 I and Their Impacts on Workers, Profits, and Stock Values," concluded that "aggregate employment has not increased above the [second] quarter of 2009, and real hourly and weekly wages have been flat to mostly negative."
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