Forum Post: A permanent drop in consumer spending by the middle class

It appears that the only way the US middle class will recover from the current economic condition would be for the government to help those who are underwater on their mortgages, and for middle class jobs to be brought back to this country from overseas.

When the housing bubble popped, consumers lost 40% of their home value, equivalent to over 7 trillion dollars. In addition, we have had six years of massive layoffs, cuts in hours, and business and store closures. Economist John Williams indicates that the true US unemployment is 23.2%. Over the past several years this has gone from 18% to 20% to 22% and now has been over 23% for the entire year. As each year goes by, more and more consumers lose their work and their purchasing power. In addition, 16% of families are on food assistance.

Consumer spending for the middle class has practically ground to a halt. Our economy is based on purchasing, so conditions are only going to get worse.