6 Signs That You've Made It To Middle Class

In the August 27, 2010 Investopedia.com article "6 Signs That You've Made It To Middle Class," James E. McWhinney says you are middle-class if you (1) own a home, (2) own a car, (3) send your children to college, (4) save money for retirement, (5) have health care coverage, and (6) have enough income for family vacations.

Not so long ago, most people viewed the hallmarks of success as something along the lines of a house, a white picket fence, two weeks vacation, two children and the ability to send those kids to college. Today, the middle class is a vanishing breed according to nearly every survey and statistic on the topic. Its disappearance is of such grave concern to the fabric of American society that the U.S. government launched a task force to explore the issue. Despite all of the attention to the subject, defining "middle class" remains a challenge, as everyone wants to be in the middle regardless of their income. Instead of focusing on the dollars, let's take a look at the lifestyle benchmarks that define middle class status.

Have You Made it to the Middle?
A wide variety of numbers have been thrown around in an effort to define the middle. People earning 20% of the average income and people earning 80% all claim to be part of the middle class. More than a few millionaires make the claim too. While there is no official financial standard, the middle class as defined by the government task force is characterized in terms of six financial aspirations, which we can view as benchmarks.

Home Ownership
Home ownership remains the American dream. The step up from renting to owning signifies prosperity and achievement. With median home prices ranges differing by so much in different cities across the United States, the ability to achieve this goal varies significantly by geographical location. Someone earning an income in the 50% range in Detroit may not be able to afford even a small house in Los Angeles.

Automobile Ownership
Owning an automobile provides freedom of movement and the luxury of avoiding the limited schedules and cramped quarters offered by mass transportation options such as buses and subways. Here again, the cost of cars varying widely, as does the kind of automobile required. For one driver, a used Hyundai will do the trick. For another, a new BMW signifies the achievement of this goal.

A College Education for the Kids
Helping children get ahead in life is a primary goal for middle class families. Paying for a college education for children can cost anywhere from the low tens of thousands of dollars to hundreds of thousands. Decisions about which university of college to attend can have a significant impact on the price tag.

Retirement Security
Retirement is a goal nearly everyone wants to achieve. It demonstrates success and provides a reward for decades of hard work. Once again, definitions make a difference. The amount of gold required to support your golden years will vary significantly depending on whether you want a staff of 10 at your villa in the South of France or a townhouse in Peoria, Illinois.

Health Care Coverage
The ability to obtain healthcare is an important goal for middle class wager earners and their families. The high and rising cost of medical care and prescription drugs make healthcare coverage an ever-increasing need, as going without it can have serious negative financial implications in the event of a severe illness or injury.

Family Vacation
The family vacation is a middle class staple. Vacations demonstrate that a family has disposable income and has been successful enough to take time away from work to focus on leisure.


What Happened on the Way to the Dream?
Globalization and technological advances began to reverse the growth of the middle class. The manufacturing base in the United States changed, as good-paying jobs in factories and heavy industries went overseas to lower-paying markets and labor unions lost much of their ability to bargain for high wages and good benefits. Later, white-collar jobs from accounting and data entry to reading medical images and answering telephones in call centers were also sent offshore. Many jobs that remained in the U.S. were eliminated by computers and other technological advancements that increased productivity.

To achieve or maintain a middle-class lifestyle, many households became two-income families. Achieving middle class goals became more difficult as employers eliminated their pension plans and defined-benefit plans, the cost of a college education continued to rise and the cost of healthcare jumped. For most of the 20-year period following 1990, the Commerce Department reports that real median income grew at a rate of about 20%, while the cost of a college education grew between 43% and 60%, the cost of housing rose 56% and healthcare costs jumped by 155%.

How to Get There
Although there are significant challenges to obtaining middle class status, there are some proactive steps that can help make the dream a reality. Budgeting is one of the most obvious. Understanding where your money goes each month can help you determine the exact makeup of the benchmarks you are trying to match. Are you looking for a Hyundai or a BMW?

Planning is another crucial step. Are the kids going to a state university or a private college? Are scholarships an option? Some savvy families find money for college by participating in programs which can aide families with the costs related to sending a child to university.

Working is another one of the requirements. A second job or a side business might be just what you need to boost your income and achieve some of your goals. Putting your money to work is also an important consideration. Investing has helped build wealth for generations. In fact, income earners ranked in the top 1% enjoyed significant increases in wealth even as the middle class fell into decline. Most of that wealth came from investments. Even if you don't have the means to invest for current income, you can take a few dollars from each paycheck and save for your retirement.

The Bottom Line
Don't underestimate the role of hard work and luck. Sometimes being in the right place at the right time or taking one particular course of action over another can make all the difference. So keep watching for opportunities and make the most of them when you find them. As motion-picture mogul Samuel Goldwyn said, "The harder I work, the luckier I get."

How the Stimulus Is Changing America

In the August 26, 2010 TIME magazine article "How the Stimulus Is Changing America," Michael Grunwald provides an analysis of its impact.

The American Recovery and Reinvestment Act of 2009 — President Obama's $787 billion stimulus — has been marketed as a jobs bill, and that's how it's been judged. The White House says it has saved or created about 3 million jobs, helping avoid a depression and end a recession. Republicans mock it as a Big Government boondoggle that has failed to prevent rampant unemployment despite a massive expansion of the deficit. Liberals complain that it wasn't massive enough.

It's an interesting debate. Politically, it's awkward to argue that things would have been even worse without the stimulus, even though that's what most nonpartisan economists believe. But the battle over the Recovery Act's short-term rescue has obscured its more enduring mission: a long-term push to change the country. It was about jobs, sure, but also about fighting oil addiction and global warming, transforming health care and education, and building a competitive 21st century economy. Some Republicans have called it an under-the-radar scramble to advance Obama's agenda — and they've got a point.

Yes, the stimulus has cut taxes for 95% of working Americans, bailed out every state, hustled record amounts of unemployment benefits and other aid to struggling families and funded more than 100,000 projects to upgrade roads, subways, schools, airports, military bases and much more. But in the words of Vice President Joe Biden, Obama's effusive Recovery Act point man, "Now the fun stuff starts!" The "fun stuff," about one-sixth of the total cost, is an all-out effort to exploit the crisis to make green energy, green building and green transportation real; launch green manufacturing industries; computerize a pen-and-paper health system; promote data-driven school reforms; and ramp up the research of the future. "This is a chance to do something big, man!" Biden said during a 90-minute interview with TIME.

For starters, the Recovery Act is the most ambitious energy legislation in history, converting the Energy Department into the world's largest venture-capital fund. It's pouring $90 billion into clean energy, including unprecedented investments in a smart grid; energy efficiency; electric cars; renewable power from the sun, wind and earth; cleaner coal; advanced biofuels; and factories to manufacture green stuff in the U.S. The act will also triple the number of smart electric meters in our homes, quadruple the number of hybrids in the federal auto fleet and finance far-out energy research through a new government incubator modeled after the Pentagon agency that fathered the Internet.

The only stimulus energy program that's gotten much attention so far — chiefly because it got off to a slow start — is a $5 billion effort to weatherize homes. But the Recovery Act's line items represent the first steps to a low-carbon economy. "It will leverage a very different energy future," says Kristin Mayes, the Republican chair of Arizona's utility commission. "It really moves us toward a tipping point."

The stimulus is also stocked with nonenergy game changers, like a tenfold increase in funding to expand access to broadband and an effort to sequence more than 2,300 complete human genomes — when only 34 were sequenced with all previous aid. There's $8 billion for a high-speed passenger rail network, the boldest federal transportation initiative since the interstate highways. There's $4.35 billion in Race to the Top grants to promote accountability in public schools, perhaps the most significant federal education initiative ever — it's already prompted 35 states and the District of Columbia to adopt reforms to qualify for the cash. There's $20 billion to move health records into the digital age, which should reduce redundant tests, dangerous drug interactions and errors caused by doctors with chicken-scratch handwriting. Health and Human Services Secretary Kathleen Sebelius calls that initiative the foundation for Obama's health care reform and "maybe the single biggest component in improving quality and lowering costs."

Any of those programs would have been a revolution in its own right. "We've seen more reform in the last year than we've seen in decades, and we haven't spent a dime yet," says Education Secretary Arne Duncan. "It's staggering how the Recovery Act is driving change."

That was the point. Critics have complained that while the New Deal left behind iconic monuments — courthouses, parks, the Lincoln Tunnel, the Grand Coulee Dam — this New New Deal will leave a mundane legacy of sewage plants, repaved roads, bus repairs and caulked windows. In fact, it will create new icons too: solar arrays, zero-energy border stations, an eco-friendly Coast Guard headquarters, an "advanced synchrotron light source" in a New York lab. But its main legacy will be change. The stimulus passed just a month after Obama's inauguration, but it may be his signature effort to reshape America — as well as its government.

"Let's Just Go Build It!"

After Obama's election, Depression scholar Christina Romer delivered a freak-out briefing to his transition team, warning that to avoid a 1930s-style collapse, Washington needed to pump at least $800 billion into the frozen economy — and fast. "We were in a tailspin," recalls Romer, who is about to step down as chair of Obama's Council of Economic Advisers. "I was completely sympathetic to the idea that we shouldn't just dig ditches and fill them in. But saving the economy had to be paramount." Obama's economists argued for tax cuts and income transfers to get cash circulating quickly, emergency aid to states to prevent layoffs of cops and teachers and off-the-shelf highway projects to put people to work. They wanted a textbook Keynesian response to an economy in cardiac arrest: adding money to existing programs via existing formulas or handing it to governors, seniors and first-time home buyers. They weren't keen to reinvent the wheel.

But Obama and Biden also saw a golden opportunity to address priorities; they emphasized shovel-worthy as well as shovel-ready. Biden recalls brainstorming with Obama about an all-in push for a smarter electrical grid that would reduce blackouts, promote renewables and give families more control over their energy diet: "We said, 'God, wouldn't it be wonderful? Why don't we invest $100 billion? Let's just go build it!' "

It wasn't that easy. Utilities control the grid, and new wires create thorny not-in-my-backyard zoning issues; there wasn't $100 billion worth of remotely shovel-ready grid projects. It's hard to transform on a timeline, and some congressional Democrats were less interested in transforming government than growing it. For instance, after securing $100 billion for traditional education programs, House Appropriations Committee chairman Dave Obey tried to stop any of it from going to Race to the Top, which is unpopular with teachers' unions.

Ultimately, even Obama's speed focused economists agreed that stimulus spending shouldn't dry up in 2010. And some Democrats were serious about investing wisely, not just spending more. So House Speaker Nancy Pelosi insisted on $17 billion for research. House Education and Labor Committee chairman George Miller fought to save Race to the Top. And while the grid didn't get a $100 billion reinvention, it did get $11 billion after decades of neglect, which could shape trillions of dollars in future utility investments.

It takes time to set up new programs, but now money is flowing to deliver high-speed Internet to rural areas, spread successful quit-smoking programs and design the first high-speed rail link from Tampa to Orlando. And deep in the Energy Department's basement — in a room dubbed the dungeon — a former McKinsey & Co. partner named Matt Rogers has created a government version of Silicon Valley's Sand Hill Road, blasting billions of dollars into clean-energy projects through a slew of oversubscribed grant programs. "The idea is to transform the entire energy sector," Rogers says. "What's exciting is the way it fits all together."

"They Won't All Succeed"

The green industrial revolution begins with gee-whiz companies like A123 Systems of Watertown, Mass. Founded in 2001 by MIT nanotechnology geeks who landed a $100,000 federal grant, A123 grew into a global player in the lithium-ion battery market, with 1,800 employees and five factories in China. It has won $249 million to build two plants in Michigan, where it will help supply the first generation of mass-market electric cars. At least four of A123's suppliers received stimulus money too. The Administration is also financing three of the world's first electric-car plants, including a $529 million loan to help Fisker Automotive reopen a shuttered General Motors factory in Delaware (Biden's home state) to build sedans powered by A123 batteries. Another A123 customer, Navistar, got cash to build electric trucks in Indiana. And since electric vehicles need juice, the stimulus will also boost the number of U.S. battery-charging stations by 3,200%.

"Without government, there's no way we would've done this in the U.S.," A123 chief technology officer Bart Riley told TIME. "But now you're going to see the industry reach critical mass here."

The Recovery Act's clean-energy push is designed not only to reduce our old economy dependence on fossil fuels that broil the planet, blacken the Gulf and strengthen foreign petro-thugs but also to avoid replacing it with a new economy that is just as dependent on foreign countries for technology and manufacturing. Last year, exactly two U.S. factories made advanced batteries for electric vehicles. The stimulus will create 30 new ones, expanding U.S. production capacity from 1% of the global market to 20%, supporting half a million plug-ins and hybrids. The idea is as old as land-grant colleges: to use tax dollars as an engine of innovation. It rejects free-market purism but also the old industrial-policy approach of dumping cash into a few favored firms. Instead, the Recovery Act floods the zone, targeting a variety of energy problems and providing seed money for firms with a variety of potential solutions. The winners must attract private capital to match public dollars — A123 held an IPO to raise the required cash — and after competing for grants, they still must compete in the marketplace. "They won't all succeed," Rogers says. "But some will, and they'll change the world."

The investments extend all along the food chain. A brave new world of electric cars powered by coal plants could be dirtier than the oil-soaked status quo, so the stimulus includes an unheard-of $3.4 billion for clean-coal projects aiming to sequester or reuse carbon. There are also lucrative loan guarantees for constructing the first American nuclear plants in three decades. And after the credit crunch froze financing for green energy, stimulus cash has fueled a comeback, putting the U.S. on track to exceed Obama's goal of doubling renewable power by 2012. The wind industry added a record 10,000 megawatts in 2009. The stimulus is also supporting the nation's largest photovoltaic solar plant, in Florida, and what will be the world's two largest solar thermal plants, in Arizona and California, plus thousands of solar installations on homes and buildings.

The stimulus is helping scores of manufacturers of wind turbines and solar products expand as well, but today's grid can only handle so much wind and solar. A key problem is connecting remote wind farms to population centers, so there are billions of dollars for new transmission lines. Then there is the need to find storage capacity for when it isn't windy or sunny outside. The current grid is like a phone system without voice mail, a just-in-time network where power is wasted if it doesn't reach a user the moment it's generated. That's why the Recovery Act is funding dozens of smart-grid approaches. For instance, A123 is providing truckloads of batteries for a grid-storage project in California and recycled electric-car batteries for a similar effort in Detroit. "If we can show the utilities this stuff works," says Riley, "it will take off on its own."

Today, grid-scale storage, solar energy and many other green technologies are too costly to compete without subsidies. That's why the stimulus launched the Advanced Research Projects Agency-Energy (ARPA-E), a blue-sky fund inspired by the Pentagon's Defense Advanced Research Projects Agency (DARPA), the incubator for GPS and the M-16 rifle as well as the Internet. Located in an office building a block from the rest of the Energy Department, ARPA-E will finance energy research too risky for private funders, focusing on speculative technologies that might dramatically cut the cost of, say, carbon capture — or not. "We're taking chances, because that's how you put a man on the moon," says director Arun Majumdar, a materials scientist from the University of California, Berkeley. "Our idea is it's O.K. to fail. You think America's pioneers never failed?"

ARPA-E is funding the new pioneers — mad scientists and engineers with ideas for wind turbines based on jet engines, bacteria to convert carbon dioxide into gasoline, and tiny molten-metal batteries to provide cheap high-voltage storage. That last idea is the brainchild of MIT's Donald Sadoway, who already has a prototype fuel cell the size of a shot glass. The stimulus will help him create a kind of reverse aluminum smelter to make prototypes the size of a hockey puck and a pizza box. The ultimate goal is a commercial scale battery the size of a tractor trailer that could power an entire neighborhood. "We need radical breakthroughs, so we need radical experiments," Sadoway says. "These projects send chills down the spine of the carbon world. If a few of them work, [Venezuela's Hugo] Chávez and [Iran's Mahmoud] Ahmadinejad are out of power."

Then again, the easiest way to blow up the energy world would be to stop wasting so much. That's the final link in the chain, a full-throttle push to make energy efficiency a national norm. The Recovery Act is weatherizing 250,000 homes this year. It gave homeowners rebates for energy-efficient appliances, much as the Cash for Clunkers program subsidized fuel-efficient cars. It's retrofitting juice-sucking server farms, factories and power plants; financing research into superefficient lighting, windows and machinery; and funneling billions into state and local efficiency efforts.

It will also retrofit 3 in 4 federal buildings. The U.S. government is the nation's largest energy consumer, so this will save big money while boosting demand for geothermal heat pumps, LED lighting and other energy-saving products. "We're so huge, we make markets," says Bob Peck, the General Services Administration's public-buildings commissioner. GSA's 93-year-old headquarters, now featuring clunky window air conditioners and wires duct-taped to ceilings, will get energy optimized heating, cooling and lighting systems, glass facades with solar membranes and a green roof; the makeover should cut its energy use 55%. It might even beta-test stimulus-funded windows that harvest sunlight. "We'll be the proving ground for innovation in the building industry," Peck says. "It all starts with renovating the government."

The New Venture Capitalists

The stimulus really is starting to change Washington — and not just the buildings. Every contract and lobbying contact is posted at Recovery.gov, with quarterly data detailing where the money went. A Recovery Board was created to scrutinize every dollar, with help from every major agency's independent watchdog. And Biden has promised state and local officials answers to all stimulus questions within 24 hours. It's a test-drive for a new approach to government: more transparent, more focused on results than compliance, not just bigger but better. Biden himself always saw the Recovery Act as a test — not only of the new Administration but of federal spending itself. He knew high-profile screwups could be fatal, stoking antigovernment anger about bureaucrats and two-car funerals. So he spends hours checking in, buttering up and banging heads to keep the stimulus on track, harassing Cabinet secretaries, governors and mayors about unspent broadband funds, weatherization delays and fishy projects. He has blocked some 260 skate parks, picnic tables and highway beautifications that flunked his what-would-your-mom-think test. "Imagine they could have proved we wasted a billion dollars," Biden says. "Gone, man. Gone!"

So far, despite furor over cash it supposedly funneled to contraception (deleted from the bill) and phantom congressional districts (simply typos), the earmark-free Recovery Act has produced surprisingly few scandals. Prosecutors are investigating a few fraud allegations, and critics have found some goofy expenditures, like $51,500 for water-safety-mascot costumes or a $50,000 arts grant to a kinky-film house. But those are minor warts, given that unprecedented scrutiny. Biden knows it's early — "I ain't saying mission accomplished!" — but he calls waste and fraud "the dogs that haven't barked."

The Recovery Act's deeper reform has been its focus on intense competition for grants instead of everybody-wins formulas, forcing public officials to consider not only whether applicants have submitted the required traffic studies and small-business hiring plans but also whether their projects make sense. Already staffed by top technologists from MIT, Duke and Intel, ARPA-E recruited 4,500 outside experts to winnow 3,700 applications down to 37 first-round grants. "We've taken the best and brightest from the tech world and created a venture fund — except we're looking for returns for the country," Majumdar says. These change agents didn't uproot their lives to fill out forms in triplicate and shovel money by formula. They want to reinvent the economy, not just stimulate it. Sadoway, the MIT battery scientist, is tired of reporting how many jobs he's created in his lab: "If this works, I'll create a million jobs!"

Obama has spent most of his first term trying to clean up messes — in the Gulf of Mexico, Iraq and Afghanistan, on Wall Street and Main Street — but the details in the stimulus plan are his real down payment on change. The question is which changes will last. Will electric cars disappear after the subsidies disappear? Will advanced battery factories migrate back to China? Will bullet trains ever get built? The President wants to extend transformative programs like ARPA-E. But would they be substitutes for the status quo or just additions to tack onto the deficit? And would they survive a Republican Congress?

Polls suggest the actual contents of the Recovery Act are popular. But the idea of the stimulus itself remains toxic — and probably will as long as the recovery remains tepid. "Today, it's judged by jobs," Rogers says of the act. "But in 10 years, it'll be judged by whether it transformed our economy."

Building a Nation of Know-Nothings

In the August 25, 2010 New York Times editorial "Building a Nation of Know-Nothings," Timothy Egan suggests that in the consideration of politics, many people are willfully ignorant of the truth.

Having shed much of his dignity, core convictions and reputation for straight talk, Senator John McCain won his primary on Tuesday against the flat-earth wing of his party. Now McCain can go search for his lost character, which was last on display late in his 2008 campaign for president.

Remember the moment: a woman with matted hair and a shaky voice rose to express her doubts about Barack Obama. “I have read about him,” she said, “and he’s not — he’s an Arab.”

McCain was quick to knock down the lie. “No, ma’am,” he said, “he’s a decent family man, a citizen.”

That ill-informed woman — her head stuffed with fabrications that could be disproved by a pre-schooler — now makes up a representative third or more of the Republican party. It’s not just that 46 percent of Republicans believe the lie that Obama is a Muslim, or that 27 percent in the party doubt that the president of the United States is a citizen. But fully half of them believe falsely that the big bailout of banks and insurance companies under TARP was enacted by Obama, and not by President Bush.

Take a look at Tuesday night’s box score in the baseball game between New York and Toronto. The Yankees won, 11-5. Now look at the weather summary, showing a high of 71 for New York. The score and temperature are not subject to debate.

Yet a president’s birthday or whether he was even in the White House on the day TARP was passed are apparently open questions. A growing segment of the party poised to take control of Congress has bought into denial of the basic truths of Barack Obama’s life. What’s more, this astonishing level of willful ignorance has come about largely by design, and has been aided by a press afraid to call out the primary architects of the lies.

The Democrats may deserve to lose in November. They have been terrible at trying to explain who they stand for and the larger goal of their governance. But if they lose, it should be because their policies are unpopular or ill-conceived — not because millions of people believe a lie.

In the much-discussed Pew poll reporting the spike in ignorance, those who believe Obama to be Muslim say they got their information from the media. But no reputable news agency — that is, fact-based, one that corrects its errors quickly — has spread such inaccuracies.

So where is this “media?” Two sources, and they are — no surprise here — the usual suspects. The first, of course, is Rush Limbaugh, who claims the largest radio audience in the land among the microphone demagogues, and his word is Biblical among Republicans. A few quick examples of the Limbaugh method:

“Tomorrow is Obama’s birthday — not that we’ve seen any proof of that,” he said on Aug. 3. “They tell us Aug. 4 is the birthday; we haven’t seen any proof of that.”

Of course, there is proof as clear as that baseball box score. Look here, www.factcheck.org, for starters, one of many places posting Obama’s Hawaiian birth certificate.

On the Muslim deception, Limbaugh has sprinkled lie dust all over the place. “Obama says he’s a Christian, but where’s the evidence?” he said on Aug. 19. He has repeatedly called the president “imam Obama,” and said, “I’m just throwing things out there, folks, because people are questioning his Christianity.”

You see how he works. He drops in suggestions, hints, notes that “people are questioning” things. The design is to make Obama un-American. Then he says it’s a tweak, a provocation. He says this as a preemptive way to keep the press from calling him out. And it works; long profiles of Limbaugh have largely gone easy on him.

Once Limbaugh has planted a lie, a prominent politician can pick it up, with little nuance. So, over the weekend, Kim Lehman, one of Iowa’s two Republican National Committee members, went public with doubts on Obama’s Christianity. Of course, she was not condemned by party leaders.

It’s curious, also, that any felon, drug addict, or recovering hedonist can loudly proclaim a sudden embrace of Jesus and be welcomed without doubt by leaders of the religious right. But a thoughtful Christian like Obama is still distrusted.

“I am a devout Christian,” Obama told Christianity Today in 2008. “I believe in the redemptive death and resurrection of Jesus Christ.” That’s not enough, apparently, for Rev. Franklin Graham, the partisan son of the great evangelical leader, who said last week that Obama was “born a Muslim because of the religious seed passed on from his father.”

Actually, he was born from two non-practicing parents, and his Kenyan father was absent for all of his upbringing. Obama came to his Christianity like millions of people, through searching and questioning.

Finally, there is Fox News, whose parent company has given $1 million to Republican causes this year but still masquerades as a legitimate source of news. Their chat and opinion programs spread innuendo daily. The founder of Politifact, another nonpartisan referee to the daily rumble, said two of the site’s five most popular items on its Truth-o-meter are corrections of Glenn Beck.

Beck tosses off enough half-truths in a month to keep Politifact working overtime. Of late, he has gone after Michelle Obama, whose vacation in Spain was “just for her and approximately 40 of her friends.” Limbaugh had a similar line, saying the First Lady “is taking 40 of her best friends and leasing 60 rooms at a five-star hotel — paid for by you.”

The White House said Michelle Obama and her daughter Sasha were accompanied by just a few friends — and they paid their own costs. But, wink, wink, the damage is done. He’s Muslim and foreign. She’s living the luxe life on your dime. They don’t even have to mention race. The code words do it for them.

Climate-change denial is a special category all its own. Once on the fringe, dismissal of scientific consensus is now an article of faith among leading Republicans, again taking their cue from Limbaugh and Fox.

It would be nice to dismiss the stupid things that Americans believe as harmless, the price of having such a large, messy democracy. Plenty of hate-filled partisans swore that Abraham Lincoln was a Catholic and Franklin Roosevelt was a Jew. So what if one-in-five believe the sun revolves around the earth, or aren’t sure from which country the United States gained its independence?

But false belief in weapons of mass-destruction led the United States to a trillion-dollar war. And trust in rising home value as a truism as reliable as a sunrise was a major contributor to the catastrophic collapse of the economy. At its worst extreme, a culture of misinformation can produce something like Iran, which is run by a Holocaust denier.

It’s one thing to forget the past, with predictable consequences, as the favorite aphorism goes. But what about those who refuse to comprehend the present?

Why are we so willing to repeat history's mistakes?

In the August 20, 2010 Salon editorial "
Why are we so willing to repeat history's mistakes?," David Sirota suggests that the pursuit of money and devotion to ideology cause people to overlook important lessons from history:

Out of all the famous quotations, few better describe this eerily familiar time than those attributed to George Santayana and Yogi Berra. The former, a philosopher, warned that "those who cannot remember the past are condemned to repeat it." The latter, a baseball player, stumbled into prophecy by declaring, "It's déjà vu all over again."

As movies give us bad remakes of already bad productions (hello, "Predators"), television resuscitates ancient clowns (howdy, Dee Snider) and music revives pure schlock (I'm looking at you, Devo), we are now surrounded by the obvious mistakes of yesteryear. And it might be funny -- it might be downright hilarious -- if only this cycle didn't infect the deadly serious stuff.

Vietnam showed us the perils of occupation, then the Iraq war showed us the same thing -- and yet now, we are somehow doing it all over again in Afghanistan. The Great Depression underscored the downsides of laissez-faire economics, the Great Recession highlighted the same danger -- and yet the new financial "reform" bill leaves that laissez-faire attitude largely intact. Ronald Reagan proved the failure of trickle-down tax cuts to spread prosperity before George W. Bush proved the same thing -- and yet now, in a recession, Congress is considering more tax cuts all over again.

These are but a few examples of mistakes being repeated ad infinitum. In a Yogi Berra country, the jarring lessons of history are remembered as mere flickers of déjà vu -- if they are remembered at all. Most often, we forget completely, seeing in George Santayana's refrain not a dark warning, but a cheery celebration. And the logical question is: Why? Why have we become so dismissive of history's lessons and therefore so willing to repeat history's mistakes?

Some of it is the modern information miasma. Though the Internet makes eons of history instantly available, the 24-7, moment-to-moment typhoon of cable screamfests, blogs, tweets, e-mail alerts and "breaking news" graphics makes last week's news feel old, and last month's news feel positively paleolithic. Add to this reportage that is increasingly presented with zero context, and it's clear that journalism is sowing mass senility.

Politicians also make significant contributions to the problem. With the age of the permanent campaign intensifying and the era of the long-term electoral majority ending, both parties deliberately focus only on the very recent past -- and obscure the larger historical record. From the national debt to poverty to the downsides of American empire, Republicans tell us it's all the fault of Democrats' two-year-old reign, while Democrats blame it on Bush's eight-year presidency. This, even though these emergencies developed over decades.

And then, of course, there is ideology.

With the present so radically departing from our past, history has become a damning package of inconvenient truths -- and those truths are often shunned because they threaten today's most powerful ideological interests.

This is why in the debates over war, economics and taxes, we aren't urged to consider past conflicts; we aren't encouraged to remember that America experienced its most storied growth under the New Deal's aggressive financial regulation; and we aren't told that wages and job growth expanded in the mid-20th century with a top income tax bracket above 70 percent. We aren't reminded of these facts because they threaten the defense industry, Wall Street and high-income taxpayers, respectively -- and those forces exert enormous influence over our political discourse, whether through media sponsorship, political campaign contributions or lobbying.

No matter the issue, this axiom is the same: When money has a vested interest in burying history, history is inevitably buried, ultimately leading us from Santayana and Berra's aphorisms to Albert Einstein's definition of insanity: doing the same things over and over again and somehow expecting different results.

Basil Marceaux

In this episode of The Colbert Report, "Basil Marceaux.com & Obama's Birthday,"
"Stephen reminds Tennessee viewers to vote for Basil Marceaux.com and refuses to celebrate President Obama's birthday. (02:16)"

Not all political candidates are as clueless as Marceaux, but too many of them are, especially on issues of economic policy.

The GOP Plot to Screw the Economy and the Middle Class

Bob Cesca comments on The GOP Plot to Screw the Economy and the Middle Class.

Buffett warns Obama U.S. economy only halfway back

Recent surveys suggest that U.S. citizens are increasingly dissatisfied with President Obama's leadership, primarily because unemployment remains high. What people fail to realize, however, is that economic recovery frequently takes time, regardless of the actions taken by political leaders. Billionaire Warren Buffett understands this and conveyed his feelings to the President.

Political leaders frequently receive too much blame for poor economic performance and too much credit for prosperity. A better understanding of the sources of economic growth might make public perceptions more accurate.

In the July 16 Reuters article "Buffett warns Obama U.S. economy only halfway back," Alister Bull summarizes Buffett's claim that the economic recovery will take time, regardless of the country's leadership.

WASHINGTON (Reuters) – President Barack Obama heard a sobering message from Warren Buffett when he asked for the investment guru's views about the economic recovery, according to an interview Obama gave NBC News on Thursday.

"I'll tell you exactly what Warren Buffett said. He said, 'We went through a wrenching recession. And so we have not fully recovered. We're about 40, 50 percent back. But we've still got a long way to go'," Obama told NBC during a visit to Holland, Michigan, to promote his job creation policies.

Obama chatted with Buffett in the Oval office on Wednesday as he sought ideas on how to translate higher U.S. growth into stronger hiring. This would help him deliver on an election year promise to tackle unemployment currently at 9.5 percent.

Buffett, who built an estimated $47 billion fortune running his insurance and investment company Berkshire Hathaway Inc, warned Obama the recession created a huge overhang of excess capacity in the economy that would simply take time to mop up.

Obama said Buffett specifically used the example of the U.S. housing market, noting 1.2 million new homes were built on average per year in the United States, according to historic trends. That number soared above 2 million during the property bubble, but construction activity has since collapsed.

"What Warren pointed out was, look, we're gonna get back to 1.2 (million). But right now we're soaking up a whole bunch of inventory. So a lot of -- the challenge is to work our way through this recession," Obama said.

High unemployment is another type of excess economic capacity. Obama's Democrats risk severe punishment by voters in midterm congressional elections on November 2 if he fails to convince them stronger U.S. growth means better times ahead.

New White House report claims more jobs from stimulus bill

According to the July 14, 2010 article "New WH report claims more jobs from stimulus bill," the Obama administration claims the federal government stimulus spending program prevented unemployment in the U.S. from being worse than it was. Claims such as this are impossible to prove (or disprove), however. The report is an attempt to deflect blame from the President for the condition of the economy and to inform the public that the Obama administration has been pursuing the standard remedies for fighting economic recession: expansionary fiscal policy (in the forms of increased government spending and tax cuts) and expansionary monetary policy (in the form of low interest rates).

According to the article:

WASHINGTON – A new White House report says last year's $862 billion stimulus law has now "saved or created" between 2.5 million and 3.6 million jobs.

That's up from 2.2 million to 2.8 million in the last quarterly report from the White House Council of Economic Advisers.

Christina Romer, head of the council, says in congressional testimony prepared for Wednesday that every $1 from the stimulus bill is matched by $3 in private money.

She says the law "appears to be stimulating private investment and job creation at a time when the economy needs it most."

President Barack Obama has traveled the country telling voters that as bad as things are, they'd be worse without the stimulus. He acknowledges the message is a tough sell. Obama travels Thursday to Michigan.

Misunderstandings about Socialism

The irony of this billboard is that it seems to be based in fear and ignorance, yet purports to inform its readers to be mindful of fear and naiveté. Socialism is fundamentally about the public ownership and operation of the means of production in an economy.

In the July 13, 2010 article "Billboard linking Obama, Hitler draws complaints," Associated Press writer Luke Meredith explains how the sign caused controversy, even within the tea party movement.

DES MOINES, Iowa – A billboard created by an Iowa tea party group that compares President Barack Obama to Adolf Hitler and Vladimir Lenin is drawing sharp criticism — even from fellow tea party activists who have condemned it as offensive and a waste of money.

The North Iowa Tea Party began displaying the billboard in downtown Mason City last week. The sign shows large photographs of Obama, Nazi leader Hitler and communist leader Lenin beneath the labels "Democrat Socialism," "National Socialism," and "Marxist Socialism."

Beneath the photos is the phrase, "Radical leaders prey on the fearful & naive."

The co-founder of the roughly 200-person group said the billboard was intended to send an anti-socialist message. But Bob Johnson admitted Tuesday that the message may have gotten lost amid the images of fascist and communist leaders.

"The purpose of the billboard was to draw attention to the socialism. It seems to have been lost in the visuals," Johnson said. "The pictures overwhelmed the message. The message is socialism." He said he didn't know of any plans to remove the sign.

But others in the tea party movement criticized the sign.

"That's just a waste of money, time, resources and it's not going to further our cause," said Shelby Blakely, a leaders of the Tea Party Patriots, a national group. "It's not going to help our cause. It's going to make people think that the tea party is full of a bunch of right-wing fringe people, and that's not true."

Blakely also expressed outrage at linking Obama to Hitler, the leader of Nazi Germany who oversaw the killing of 6 million Jews and whose invasions of neighboring countries led to World War II.

"When you compare Obama to Hitler, that to me does a disservice to the Jews who both survived and died in the Holocaust and to the Germans who lived under Nazi regime rule," Blakely said.

John White, an Iowa coordinator of the Tea Party Patriots, said that he can understand the North Iowa group's perception that Obama is "Hitler-esque," but he thinks the billboard is offensive and unproductive. White said that he planned to discuss the matter with national tea party officials.

"I fear they may end up in some kind of trouble over it, because it's basically slanderous," White said. "I don't know that it's the message we want to send. I'd much rather see billboards that say 'Remember in November. Get Out and Vote.'"

The billboard is owned by Waitt Outdoor of Omaha, Neb. Waitt general manager, Kent Beatty, said the company didn't have a problem with the message.

"We believe in freedom of speech," Beatty said. "It doesn't reflect our views, necessarily."

The White House declined to comment on the sign.

One person who welcomed the billboard was Dean Genth, a Democratic activist from Mason City, a city of 30,000 people just south of the Minnesota border, who said he thinks the sign lays bare the views of tea party supporters.

"I welcome them to continue to spew that kind of stuff because I think it's going to do a lot of good for the good Democrats around the state," Genth said.
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The Only Debt You Should Hold

The July 13, 2010 Bankrate.com article "Good Debt vs. Bad Debt" provides some guidelines on when it is wise and unwise to borrrow money:

Debt is a concept as intricately intertwined with America these days as baseball, Mom and apple pie.

The amount of personal debt in this country is ever-increasing, and a large part of the reason is that credit has never been easier to get. Whereas credit card issuers previously looked for customers who could repay, today card issuers relish the chance to reel in those who'll continuously charge beyond their means at 18 percent or 20 percent.

But debt is a complex concept. Not all of it is good -- a fact a surprising number of Americans fail to realize until they're in the hole -- and yet not all of it is bad. When used intelligently, debt can be of tremendous assistance in building wealth.

One of the secrets, therefore, to being smart with your money is to differentiate between good debt and bad debt. While the differences often seem logical, it is a logic that apparently is missed by many Americans.

"When you buy something that goes down in value immediately, that's bad debt," says David Bach, CEO of Finish Rich Inc., and author of "The Finish Rich Workbook." "If it has no potential to increase in value, that's bad debt."

Good Debt

"Good debt is investment debt that creates value; for example, student loans, real estate loans, home mortgages and business loans," says Eric Gelb, CEO of Gateway Financial Advisors and author of "Getting Started in Asset Allocation."
Robert D. Manning, a professor of finance at the Rochester Institute of Technology, also recommends taking on debts that are tax-deductible and debts that produce more wealth in the long run.

"If you are talking about reducing current debt, that's where it starts to get nuanced," says Manning. "If you take a home equity loan because you have 17 percent credit card, and you go with a 6 percent loan that's tax-deductible, that's good debt."

These general rules of thumb set some clear delineations -- buying a home or refinancing to get rid of excessively high rates is usually good debt, as is generating debt to buy high-return stocks, bonds and other investments.

Bad Debt

The concept of bad debt comes in when discussing the purchase of disposable items or durable goods using high-interest credit cards and not paying the balance in full.
"The trouble is most people are not organized enough to retire the entire balance before the due date," says Gelb.

Every month that you make a partial payment on your credit account you are charged interest. The disposable or durable item you purchased continues to lose value, and the amount you paid for it continues to increase.

"When you buy clothes, they're probably worth less than 50 percent what you pay for them when you walk out the door," says Bach. "So if you borrowed to pay for them, that's bad debt."

Credit Rating Effect

Not to mention what that debt could potentially do to your credit rating. "Total personal debt should not exceed 36 percent of your total income," says Gelb. Keeping the debt-to-income ratio in mind, it's also important not to miss payments. "Missed payments are trouble," he says. "A representative of Citibank said if you don't pay within 30 days, they report that to the credit bureaus."

When it comes to buying durable goods that won't contribute to wealth generation, Bach offers a basic rule of thumb. "My grandma used to say that if you're going to buy something that doesn't go up in value, and you can't afford to pay cash, then you can't afford it."

Exacerbating the bad debt factor is that people will apply for store credit for the savings offers that say if you open a credit card account today, you can take 10 percent to 20 percent off the cost of your purchase. What people often don't realize is how much of that savings will be destroyed by the high interest rate on the card if they fail to pay for the items immediately.

"You can open a store credit card account," says Bach, "and what they're not telling you is that after the first few months, the rate jumps to 20 percent or greater."

Driving Into Debt

Another bad debt area is auto debt. While most people need an automobile, and the ultimate cost of an auto is higher than many people can pay in one lump sum, the way people go about it -- namely, purchasing more car than they need -- turns it into bad debt.

When is it worth it?

"What we would normally consider bad debt can turn into good debt in certain circumstances," says Catie Fitzgerald, a personal finance coach and registered investment adviser in Henderson, Nev. "If you use debt to buy a car that gets better gas mileage than your old vehicle, you could end up better off financially."

Bach considers auto debt a Catch-22. "People borrow to buy cars before homes," says Bach, "and that's unfortunate. For most people, their first major loan is a car loan. That's guaranteed to go down in value. So you really want to borrow less. For example, instead of rushing out to borrow to buy a $50,000 BMW, you'd be better off buying a $25,000 car."

The Best Debt

The best type of debt is debt that builds wealth over the long run, and the No. 1 example of that is mortgage debt.

"Home values have increased an average of 6.5 percent a year over the past 30 years," says Bach. "So when you borrow to buy a home, chances are that's good debt. You'll build value."

Bach heavily promotes the idea of homeownership, saying that everyone needs to own where they live. "About 40 percent of Americans are renters," says Bach, "and the fastest way to wealth in America is buying where you live."

Bach cites some shocking numbers to back this up. "The average renter has a median net worth of $4,000, and the average homeowner has a median net worth of about $150,000."

Manning also emphasizes what a good time this is to build wealth through debt. "This is the most advantageous time ever to be in debt," says Manning, "in terms of opportunities to get low-interest loans or to renegotiate or refinance."

Duh, Debt?

One of the reasons so many Americans seem mired in bad debt (Bach reports that the average American carries approximately $8,400 in credit card debt) is that financial education is pratically nonexistent. "This type of commonsense stuff isn't taught in school," says Bach, "and most Americans don't realize how bad high-rate credit cards are hurting them."

Fitzgerald advises teaching your children the difference between good debt (debt that's used to buy assets that grow in value over time) and bad debt (debt that's used to buy things that will lose value) early on.

Gelb opts for a more hands-on approach. "Give your children an allowance (without strings) beginning when they're in kindergarten and offer them the opportunity to perform extra jobs around the house for money. Stop buying them everything, and teach them how to make choices with their own money-buying decisions." The mistakes they make will help them learn and grow.

"People are getting in debt before they have a job," says Manning. "Education is important. We used to encourage kids to save, and that has been missed. Students now refer to their credit cards as 'yuppie food stamps'. They see cards as entitlement, and see they will be in debt all their lives."

Fitzgerald recommends teaching by example. Treat credit cards like emergency safety nets and your children will likely learn some money management skills. "If you have to use your credit card, immediately revise your budget, paring back on nonessential spending. Allocate the saved dollars to a pay-off plan to bring your debt balance down to zero as soon as possible," she says.

Good Debt

• Mortgage
• School Loan
• Real Estate Loan
• Business Loan

Bad Debt

• Credit Card
• Store Credit Card
• Auto Loan

Debt commission leaders paint gloomy picture

Debt commission leaders paint gloomy picture

By GLEN JOHNSON, Associated Press Writer Glen Johnson, Associated Press Writer Sun Jul 11, 9:30 pm ET

BOSTON – The heads of President Barack Obama's national debt commission painted a gloomy picture Sunday as the United States struggles to get its spending under control.

Republican Alan Simpson and Democrat Erskine Bowles told a meeting of the National Governors Association that everything needs to be considered — including curtailing popular tax breaks, such as the home mortgage deduction, and instituting a financial trigger mechanism for gaining Medicare coverage.

The nation's total federal debt next year is expected to exceed $14 trillion — about $47,000 for every U.S. resident.

"This debt is like a cancer," Bowles said in a sober presentation nonetheless lightened by humorous asides between him and Simpson. "It is truly going to destroy the country from within."

Simpson said the entirety of the nation's current discretionary spending is consumed by the Medicare, Medicaid and Social Security programs.

"The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans, the whole rest of the discretionary budget, is being financed by China and other countries," said Simpson. China alone currently holds $920 billion in U.S. IOUs.

Bowles said if the U.S. makes no changes it will be spending $2 trillion by 2020 just for interest on the national debt.

"Just think about that: All that money, going somewhere else, to create jobs and opportunity somewhere else," he said.

Simpson, the former Republican senator from Wyoming, and Bowles, the former White House chief of staff under Democratic President Bill Clinton, head an 18-member commission. It's charged with coming up with a plan by Dec. 1 to reduce the government's annual deficits to 3 percent of the national economy by 2015.

Bowles led successful 1997 talks with Republicans on a balanced budget bill that produced government surpluses the last three years Clinton was in office and the first year of Republican George W. Bush's presidency. Simpson, as the Senate's GOP whip in 1990, helped round up votes for a budget bill in which President George H.W. Bush broke his "read my lips" pledge not to raise taxes.

Despite their backgrounds, both Simpson and Bowles said they were not 100 percent confident of success this time around.

Simpson labeled the commission members "good people of deep, deep difference, knowing the possibility of the odds of success are rather harrowing to say the least."

Bowles also said Congress had to be ready to accept the commission's findings.

"What we do is not so hard to figure out; it's the political consequences of doing it that makes it really tough," he said.

Arkansas Gov. Mike Beebe was one of those leaders who sat in rapt attention during the presentation, one of the first in public by the commission leaders.

"I don't know that I ever heard a gloomier picture painted that created more hope for me," said Beebe, commending its frankness.

___

Online:

http://www.fiscalcommission.gov/

African-American women struggle to overcome wealth gap

In the July 5, 2010 BBC News article "African-American women struggle to overcome wealth gap," Paul Adams highlights some of the difficulties associated with poverty.

7.9 million jobs lost, many forever

In the July 2, 2010 CNNMoney article "7.9 million jobs lost, many forever," Chris Isidore reports that many of the jobs lost recently will not return.

Job market not growing fast enough for big rebound

In the July 2, 2010 article "Job market not growing fast enough for big rebound," Associated Press economics writers Jeannine Aversa and Christopher S. Rugaber report:

WASHINGTON – A second straight month of lackluster hiring by American businesses is sapping strength from the economic rebound.

The jobless rate fell to 9.5 percent in June, still far too high to signal a healthy economy. It came in slightly lower than the month before only because more than a half-million people gave up looking for work and were no longer counted as unemployed.

The private sector added just 83,000 jobs for the month. Looked at from that angle or almost any other, from a teetering housing market to falling factory orders, the recovery is limping along as it enters the year's second half. And that is when the benefits of most of the government's stimulus spending will begin to wear off.

The fate of the economy will hinge on whether it can stand on its own. President Barack Obama acknowledged the slow pace of the recovery and used the new jobs figures to argue for more stimulus spending and extended unemployment benefits.

"We're not headed there fast enough for a lot of Americans," the president said. "We're not headed there fast enough for me, either."

Overall, the nation's total payroll actually shrank last month by 125,000, the first decline in six months, the Labor Department said Friday. The loss reflected the end of 225,000 temporary jobs helping the U.S. Census Bureau complete its 10-year head count.

The 83,000 jobs added by the private sector was a better performance than in May, when private job creation nearly stalled. But it fell far short of what the economy needs — at least 200,000 jobs a month — to bring down the unemployment rate.

Nobody, from Obama to Federal Reserve Chairman Ben Bernanke to private economists, expects that anytime soon. And the government has mostly exhausted its realistic options for nudging the economy along faster.

Benchmark interest rates, which at low levels can encourage borrowing to spur economic growth, are already near zero. Republicans in Congress object to additional stimulus spending.

Unemployment is expected to stay above 9 percent through the midterm elections in November. And the Fed predicts joblessness could still be as high as 7.5 percent two years from now. Normal is considered closer to 6 percent, and economists say it will probably take until the middle of this decade to achieve that.

The jobless rate did come down in June from 9.7 percent the month before. But that was mainly because 652,000 people abandoned their job searches.

Even among Americans with secure jobs, confidence is fading. One gauge of consumer confidence fell in June to about 53, down nearly 10 points in a single month. And it's well below the reading of 90 typically seen in a healthy economy.

Add to that jitters over Europe's debts, an edgy stock market and cautious consumer spending, and the result is an economy essentially moving sideways. It's no surprise that businesses are reviewing their orders and seeing no reason to add to payrolls.

Few big companies say they plan to step up hiring in the second half of the year. Most auto, airline and railroad companies, for example, say they expect little or no job growth, blaming weak demand.

One that does plan to hire, Chrysler Group LLC, expects to add engineers and other workers as it updates its aging line of cars and trucks. The company has announced 1,000 factory jobs in Detroit to meet demand for the new Jeep Grand Cherokee SUV.

But other companies, like American Airlines, have no plans to significantly boost hiring this year. And major railroads, which have furloughed thousands since the recession, say they have no plans to add employees in the coming months.

In June, manufacturers, the leisure and hospitality industries, temporary staffing agencies, and education and health services providers all added jobs. Retailers, construction firms and financial service providers cut payrolls. So did state and local governments, which are wrestling with budget shortfalls.

On Wall Street, stocks sagged yet again on the news. The Dow Jones industrial average finished down 46 points, its seventh consecutive losing session. The Dow lost more than 10 percent of its value in the second quarter.

Trying to put a positive outlook on the report, Obama said it showed that "we are headed in the right direction." At the same time, he acknowledged there is a "great deal of work to do to repair the economy and get the American people back to work."

His options are limited. Senate Republicans concerned about record budget deficits this week blocked his efforts to extend unemployment benefits for millions of out-of-work Americans.

"The two things that are growing fastest in this Democrat economy are the size of the federal government and the crushing burden of the national debt," said Senate Republican leader Mitch McConnell of Kentucky, who led opposition to the extension.

All told, 14.6 million people were unemployed in June. An additional 11.2 million have given up their job searches or are working part-time but would prefer full-time work. That adds up to nearly 26 million Americans, and an "underemployment" rate of 16.5 percent.

Among the 225,000 census workers who lost their temporary jobs in June are people who had been unemployed before and now are again. One of them is Michael Stein, who worked for the census in Phoenix on and off since April 2009, after losing his job with an architectural firm.

It all ended for good two weeks ago.

Jobless again, Stein, 49, at least feels better off with the census experience on his resume.

"I was told the State of Arizona is hiring again," he said. "Because of the people I met at the census, there's a possibility if they could find the right position, they'll put in a good word for me."

Eric Model, co-owner of Seal & Co., a shop in Summit, N.J., that sells accessories and toys, said he has not replaced the two back-office workers he let go two years ago. Not including a summer hire, Model has four employees, plus himself.

"It would be nice to get some support," Model said. "But I don't want to go out on a limb and hire somebody, anticipating things will improve. I would rather run with low expenses."

Those Americans who still have jobs drew smaller paychecks last month. Average hourly wages fell 2 cents to $22.53. Workers' hours were cut, too. Those factors could dampen consumer spending in the months ahead and further weaken the recovery.

It all threatens to perpetuate a vicious cycle for the economy.

"It is a Catch-22 situation," said Sung Won Sohn, professor at California State University, Channel Islands. "Businesses are reluctant to hire for fear of a 'double-dip' recession. Without jobs, people are watchful of their spending, a danger to the recovery."

8 Problems That Could Trigger a Double-Dip Recession

8 Problems That Could Trigger a Double-Dip Recession