Middle-Aged Bankrupts

Admit We Have a Problem
By BOB HERBERT

I suppose there are people who still believe that enormous tax cuts for the very wealthy will lead to the creation of millions of good jobs for working people. In the twilight of his first term, the president, stumping for votes in regions scarred by the demon of unemployment, continues to sing from the tattered pages of his economic hymnbook:

"The economy is strong,'' he says again and again and again, "and it's growing stronger."

At a riverfront rally under cloudy skies in Davenport, Iowa, last week, Mr. Bush told a crowd of 5,000, "We are turning the corner and we're not going back."

In another four years, he says, "The economy will be better."

His tax cuts, he insists, couldn't have been better timed.

The true believers were jolted Friday by the news from the Bureau of Labor Statistics that employers added a meager 32,000 jobs in July. In an economy the size of America's, that's roughly equivalent to no jobs at all.

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Despite the rosy rhetoric that comes nonstop from the administration, millions upon millions of American families, including many that consider themselves solidly in the middle class, are in deep economic trouble. Friday's Wall Street Journal featured a page-one article with the ominous headline: "New Group Swells Bankruptcy Court: The Middle-Aged."

Personal bankruptcy filings in the U.S. are at an all-time high. The Journal story focused on "an emerging class of middle-age, white-collar Americans who make the grim odyssey from comfortable circumstances to going broke." Among the villains of this disturbing piece are the unstable job market and staggering amounts of personal debt.

It's getting harder and harder to close our eyes to the growing economic devastation. Elizabeth Warren, a Harvard law professor and co-author of "The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke," wrote in 2003:

"This year, more people will end up bankrupt than will suffer a heart attack. More adults will file for bankruptcy than will be diagnosed with cancer. More people will file for bankruptcy than will graduate from college. And, in an era when traditionalists decry the demise of the institution of marriage, Americans will file more petitions for bankruptcy than for divorce."

The Century Foundation, in a recent study, addressed the problem of outstanding debt. For many families borrowing has morphed from a tool that, used judiciously, can enhance their standard of living into a nightmare that threatens to destroy their economic viability.

"Debt burdens," the study said, "are at record levels because families have been stretched to the limit in recent years. With more income going to housing and other rising expenses related to medical care, education, vehicles, child care, and so forth, families are relying on credit as a way to meet everyday needs. Remarkably, a family with two earners today actually has less discretionary income, after fixed costs like medical insurance and mortgage payments are accounted for, than did a family with only one breadwinner in the 1970's."

There is no plan from the administration that I've heard of to brighten this bleak picture of the American economic landscape. John Kerry and John Edwards have an opportunity in the presidential campaign to offer their prescriptions. The first essential step for anyone serious about a search for solutions would be to recognize and acknowledge the sheer enormity of the problem.