Center for American Progress

Policymakers Must Strengthen Recovery for Middle Class
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Policymakers Must Strengthen Recovery for Middle Class

Policymakers have to secure the gains of the recovery while strengthening the recovery for the American middle class.

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The country finds itself in the middle of a heated national debate over the government’s priorities. Public programs, particularly Medicare and Medicaid, but also taxes for middle-income and higher-income families are part of this key policy discussion to lower the government’s long-term structural deficits, such that economic growth can take hold and America’s middle class becomes economically more secure.

This unfolding discussion is of vital importance for American families, who are only now beginning to see a modest labor market recovery strengthening. The unemployment rate is dropping, household debt continues to decline, and financial distress shows signs of easing.

These gains, though, are tentative and could quickly evaporate. Job growth is still relatively weak; debt, credit card defaults, and foreclosures remain at comparatively high levels; and oil prices are rapidly rising, putting a damper on household budgets and slowing consumption. And the trade deficit remains stubbornly high, endangering long-term economic and job growth.

The challenge is clear. Policymakers have to secure the gains of the recovery while strengthening the recovery for the American middle class. This means maintaining consumption and investment growth in the short run and addressing trade and budget deficits in the medium term. The current budget negotiations must find a growth-enhancing balance between spending cuts and revenue increases that does not unduly encumber middle-class families who have carried much of the burden of the crisis.

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