Statistically, you can almost prove that the Great American Recession never happened. Take U.S. per capita disposable income. Adjusted for inflation (and expressed in 2005 dollars), it increased in 2005, 2006, 2007 and 2008. It fell in 2009 (from $32,946 U.S. to $32,847) by a mere $99. It increased again in 2010 - setting an all-time record ($33,019). In the 50-year span since 1960 (when it hit $10,865), real per capita disposable income has increased by more than threefold - and just keeps rising.
These numbers are national averages, which means that the Great American Recession was a time of relative prosperity for many Americans, a time of wrenching reversal for others: especially the ones who lost their jobs (real unemployment peaked at 17.4 per cent in October, 2009) and their homes (the recession obliterated 1.2 million households between 2005 and 2008). Many of these lost households were young couples compelled to double up at mom and dad's.
The average net worth of the average U.S. household didn't fare as well as disposable incomes - but the U.S. household is still a profitable enterprise. Although average net worth fell sharply in 2007 (from $607,000 at the peak in 2006 to $447,000 in 2008), average net worth has since started to rebound: rising $20,000 in 2009 and restoring household net worth to its position in the mid-1990s, a period widely regarded in retrospect as a Golden Age of sorts.
The decline in average net household worth almost precisely tracked the decline in house prices: from an average price of $180,000 at the peak of the real estate bubble in 2007 to $120,000 in 2010. In this period, average household net worth fell 25 per cent; average house prices fell 30 per cent. (Measured from the third quarter of 2007 to the first quarter of 2009, average net worth fell 28 per cent.) In the next few years, many families will presumably acquire homes at fair-market prices.
Exactly how hard did the recession hit per capita gross domestic product? This measure of wealth paused briefly before resuming its apparently inexorable rise. Look at the increases (adjusted for inflation) across the years: in 1960: $15,700; 1970, $20,900; 1980, $25,600; 1990, $32,100; 2000, $39,700 - and in 2010: $42,700.
In supplementary budget papers ("Analytical Perspectives 2012"), U.S. government economists and statisticians look at long-term trends and make long-term projections. The debt projections are well known, and sobering. But there is more to the U.S. economy than government debt. GDP exceeded $14-trillion in 2010. The budget seers calculate that it will reach $25-trillion (expressed in current dollars) by 2021 - rising annually, on average, by an amount almost equal to Canada's GDP ($1.3-trillion Canadian). In the same period, they expect incomes (again expressed in current dollars) to rise from $18-trillion (U.S.) to $32-trillion.
U.S. households used the recession to pay down debt - apparently using much of the government's stimulus funds to do so. It was essential, of course, for households to begin to save again: The budget analysts describe savings as "the key determinant of future prosperity." From a savings rate slightly above zero, American households are now saving at a rate of 5.9 per cent (as a percentage of disposable incomes), not far from the early 1960s when households saved 7.2 per cent.
The "national savings rate" is another thing altogether. Here, the analysts combine household debt with government debt to produce a comprehensive, bottom-line savings rate. The U.S. government, alas, vastly increased its own "dis-savings" - dragging down the national saving rate. In 1960, the national savings rate was 10 per cent. In 2008, it was minus 0.4 per cent. In 2009, it was minus 2.3 per cent.
So: Is the average U.S. household better off financially than it was four years ago? Yes, it is. The average household isn't unemployed. The average household isn't homeless. The average household hasn't slipped into poverty. For the average household, things are looking good. Expressed in inflation-adjusted dollars, the average household is substantially better off than it was when the easy money of the 1990s set off the biggest real estate bubble of the century. In 1990, the average net worth of the average household was $357,000. Now, at the close of the worst recession since the Great Depression and adjusted for inflation, it's $467,000.