The so-called Great Recession—as opposed to the Great Depression—ended officially in the United States in June 2009. The not-so-Great Recession ends—note the present tense—when you have a reasonable job you expect to hold and your debts are manageable.
How the recession lingers on, and how it has affected the “safety net,” those government programs that are meant to rescue, or at least the cushion the fall of, of those whose economic well-being is in jeopardy, was the subject of a panel discussion held January 30 at the Brookings Institution. Sponsored by the American Academy of Political and Social Science, The Brookings Institution, the Annie E. Casey Foundation, and SAGE, a taped presentation of the event appears below. (Please advance the video to 30:00 for the start.)
Panelist Sheldon Danziger, a public policy professor at the University of Michigan and now the president of the Russell Sage Foundation, was also the editor of a special edition of The ANNALS of the American Association Political and Social Science that last November examined the fallout of the economic crisis from a dozen different vantages.
The findings made for unpleasant reading, as Danziger noted in his introduction to the issue:
Taken as a whole, the articles in this volume paint a rather pessimistic picture of our future. Because the Great Recession was deeper and more severe than previous post–World War II recessions, it affected more Americans than previous recessions on many dimensions—employment, earnings, income, wealth (including home values and retirement security). In 2013, unemployment is higher, while inflation-adjusted earnings, family incomes, and net worth are lower than they were when the recession began in late 2007. Along all these dimensions, the typical American worker and family is worse off now than they were at the turn of the twenty-first century.
Those articles will form the basis of Thursday’s discussion, which will be moderated by Ron Haskins, the co-director of Brookings’ Center on Children and Families. Other speakers will be Isabel Sawhill, the center’s other co-director; economist Robert Moffitt of Johns Hopkins University; Betsey Stevenson, a member of the president’s Council of Economic Advisors; Robert Greenstein, president of the Center on Budget and Policy Priorities; and Michael Tanner, a senior fellow at the Cato Institute.
The event will include Moffitt, based on his own paper in The ANNALS, reviewing how the figurative “net” literally performed during the crisis—and at what monetary cost:
Aggregate spending in the main safety net programs rose from $1.6 trillion to $2.1 trillion from 2007 to 2010. Caseloads over all programs rose over the same period—from 276 million recipients to 310 million. The largest contributors to this increase were the [unemployment insurance] program, the earned Income Tax Credit (EITC), and the Supplemental Nutrition Assistance Program (SNAP), which, combined, accounted for about a third of the rise in spending.
As I’ve written elsewhere about Moffitt’s findings, “While it cost a lot, the net worked as it was supposed to—‘in significant and favorable ways,’ as the academic prose goes. Using the technical definition of the recession—periods of negative GDP growth—as opposed to the more colloquial hard times we’re still crawling away from, Moffitt shows that as the U.S. poverty rate rose by a fifth from 2007 to 2011, to 15 percent of the total population, various programs kicked in as they were built to.” But even if it functioned as advertised, has the safety net’s benefits paid off down the line?
Guests are urged to join in the conversation via Twitter using the hashtag #recessioneffects.