Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Market
Recession's Cost: $50K-$120K Per Household
DALLAS (9/11/13)--The Great Recession cost each U.S. household between $50,000 and $120,000, or the equivalent of 40% to 90% of one year's economic output, according to a study released by the Federal Reserve Bank of Dallas (MarketWatch Sept. 10).       
 
In total, that constitutes a $6 trillion to $14 trillion output loss--a combination of lost wealth, such as the lost value of a house, and decreases in current wage income and discounted future wage income from unemployment.
 
Other effects are more difficult to measure: extended unemployment, reduced opportunity and increased government presence in the economy, the Dallas Fed noted.
 
"The crisis consumed an enormous sum of financial and housing wealth. U.S. household net worth plunged $16 trillion, or 24%, from third quarter 2007 to first quarter 2009," said the Dallas Fed. "In addition, it wiped out a huge amount of 'human capital,' both current wage income and discounted future wage income; that is, a household's expectation of potential earning power.
 
"If the effects of the crisis are permanent, the path of consumption observed since 2007 suggests that the cost of the crisis may be more than double the $6 trillion to $14 trillion estimate," the study added.
 
One of the unintended consequences of the crisis is a substantial loss of faith in the U.S. capitalist economic system and government institutions. The U.S. dropped to 18th place in 2012 from second place in 2000, according to the Fraser Institute's Index of Economic Freedom global ranking. That lower ranking indicated prevalent "perceptions of less-secure property rights, bigger government, increased regulation of business and favoritism accorded to special interests," the study said.
 
To read the Dallas Fed study, use the link.
RSS print
News Now LiveWire
Stay tuned for coverage of @CUNA's BSA conference which starts Sunday. #CUNABSA #CUNACompliance
1 hours ago
Today's the last day to complete @CUNA's Home Depot data breach survey http://t.co/UcB8G9bVXe #StoptheDataBreaches
3 hours ago
Brenda Davis of Cross Roads Ministries will walk through 83 communities during the Ending Hunger Walking tour. (2 of 2)
4 hours ago
The Ending Hunger Walking tour, coordinated by the Maine CU League, kicked off at Old Maine CU in Augusta today. (1 of 2)
4 hours ago
Darwin Brokke of Citizens Community CU represented the #CU Association of Dakotas at a housing summit hosted by @SenatorHeitkamp
4 hours ago