Economic Downturn Persists

Growing Inequality

JWM's Poverty webpage

Articles and Reports

Stressed Borrowers Rattle Resurgent Subprime Lending Industry, Sept. 11, 2014.  Subprime lending is once again happening. While subprime mortgages triggered our 2007 downturn, current concerns centers on subprime auto and applicance loans. "[H]istory shows that a splurge on subprime lending nearly always leads to a crippling cascade of problems. While credit analysts do not yet see signs of an imminent market- wide disaster, they say that fissures are appearing in certain parts of the subprime sector."

Jobless Rate May Be a Flawed Indicator for Fed Policy, New York Times, Sept. 11, 2014.

Why the Middle Class Isn’t Buying Talk About Economic Good Times by Neil Irwin, New York Times, Aug. 20, 2014. For five years, the United States economy has been expanding at a steady clip, the stock market soaring, the headlines filled with talk of recovery. Yet middle-class American families’ income is lower now, when adjusted for inflation, than when the recovery began half a decade ago.

In economicstorm battered the U.S. and nations around the world starting in 2007. In the U.S. a recession lasted from late 2007 through the middle of 2009. But while the national data show the recession is over, corporate profits are at record highs, and the stock market has surpassed its pre-recession peak, the recession continues in most households. 

The church, called to do justice, love kindness, and walk humbly with God (Micah 6:8), must be especially faithful and vigilant during such a time as this. We might see its mission as three fold.

  • To ease the suffering of people affected by the crisis through both direct acts of kindness and public programs.
  • To seek God's guidance as we carefully discern how to end and prevent a recurrence of the crisis, and work to build a fairer economic system that benefits all God's people.
  • To act to bring society more closely into alignment with our understanding of God's vision for God's world.

We hope the resources on this page support this mission.

Seek First God's Reign, God's Justice [pdf 2.73 MB] is the lead article in Common Lot, the UCC's journal for women in mission, Fall 2011, page 4. "God is providing all we need. If any people have too little, it is because our communities, our nation, and our world are not based on an ethic of sharing and love ... we need a new national commitment to make the economy work for everyone."

The articles below address some of the most pressing concerns that arose during the recession. Many of the issues and policy proposals discussed are still relevant during this prolonged downturn.

Unemployment, not the Deficit, is the Nation's Problem   May, 2011
"Fully 98% of the projected 2012 federal deficit of $1.1 trillion is due to one of three factors: the economic downturn and recovery efforts, the Bush tax cuts of 2001 and 2003, and the wars in Afghanistan and Iraq. Just 2% of the deficit is due to other factors.  These figures provide guidance on ways to address the deficit. End the wars. Raise taxes on wealthy households and corporations that have benefited from the past 40 years of economic growth, and put people back to work (and back to paying taxes)." Full text

Job Creation, not Deficit Reduction, must be our National Priority. Persistently high unemployment makes job creation, not deficit reduction, our priority. May 5, 2011

Funding a Program of Job Creation. Where to get the money to fund job creation, one of our nation's highest prioritie. November 30, 2010

Create Jobs: Extend Tax Cuts for the Middle Class, End Them for the Wealthy. The best way to create jobs and be fiscally responsible is to end tax cuts for the 2% of tax payers with incomes over a quarter-million dollars a year. November 8, 2010.

Jobs, the Deficit, and our Country's Future. Testimony before the National Commission on Fiscal Responsibility and Reform, June 30, 2010. 
"As long as the economy remains weak, the recovery uncertain, and unemployment high, the federal deficit must be maintained at its current level. When the economy is once again on a sound footing, we will need to substantially reduce the deficit. But at this time, a large deficit is necessary to promote a strong economic recovery and reduce the unacceptably high and destructive level of unemployment. Moreover, a strong economy is a prerequisite for deficit reduction. Over the longer term, additional revenues must be found. The 2001 and 2003 “Bush” tax cuts must be allowed to sunset at the end of this year. In the very short term, this additional revenue should be used to stimulate the economy. Once the downturn is behind us, the added revenues will contribute to deficit reduction. Finally, the long term deficit is largely driven by the cost of health care. These high and rising costs threaten both the physical health of every individual and the fiscal health of our nation. Some small steps toward cost containment were taken in the health insurance reform bill enacted in March, but much more needs to be done. We hope the National Commission on Fiscal Responsibility and Reform will make the cost of health care a major focus of its work."  Full text

Putting People Back to Work  The importance of federal government action to create jobs and end the economic crisis. Read more.

Prevent Future Financial Crises: Protect Consumers, Re-regulate the Banks  Deregulated and under-regulated banks along with age-old abuses like usury, fraud, racist lending, and excessive greed, drove the nation and world economy to the verge of collapse. The crisis that caused suffering among millions of people in the U.S. and billions around the world did not need to happen. It must not happen again.

Essentials of the Economic Recovery   The recession has officially ended, bankers of Wall Street are once again enjoying huge bonuses, and the stock market has recovered some of its losses. But the economy on Main Street is still grim and millions of families continue to struggle. Policy makers must do much more to restore the economy and make it work for all of us. Read more.

For the Sake of Our Children, the Federal Government Must Run a Deficit at this Time  Many Americans are concerned about the large federal budget deficit. We know that carrying a large amount of debt is not good for families or individuals. We worry that large deficits can create an intolerable debt burden for our children and grandchildren who will have to pay it.  These are legitimate concerns. Cutting the deficit would be the smart thing to do if these were ordinary times. But they aren't. For the next 12 to 18 months while so many people (and children, youth, and young adults) are in economic crisis, the best thing we can do for our children is to maintain a large federal budget deficit. Read more to find out why.

The Federal Government Deficit: An Essential Tool for Putting People Back to Work and Ending the Economic Downturn  
Some people are worried about the federal government deficit and are calling for reductions in spending. But to put people back to work and strengthen the economy, the government must continue to run a large deficit. 

Households and businesses are just trying to stay afloat. State and local governments are cutting back. The only way to create jobs and get the economy back on track is for the federal government to run a deficit and spend money to buy goods and services. This will, in turn, spur firms to hire additional workers.

Federal government deficits can be a problem. A large deficit when the economy is reasonably strong can be unwise. But not running a sizable deficit when the economy is weak means economic stagnation will continue indefinitely. The time to worry about and reduce the deficit is after the crisis is behind us. At this time the country needs a large federal government deficit.  More...

Obama Needs Our Help  Commentary on the 2010 State of the Union address.   
In the State of the Union message on January 27, 2010, President Obama showed he understands the problems faced by millions of Americans. He knows that nearly one in five people who want to work can't find a job or can only find part-time work. He knows that one in nine families cannot make the minimum payment on their credit cards, that one in seven mortgages is either in default or foreclosure, and that one in eight Americans is on food stamps.

The speech also showed that President Obama is continuing to mobilize his administration to tackle the nation's severe problems. He proposed a number of measures to create jobs, his first priority. He also proposed a new fee on big banks, a revised program to prevent foreclosures, and other measures that will speed the end of the economic crisis and make life easier for many who are suffering. But the speech also showed that Obama is still too influenced by advisors who promote the failed policies of the past.   Continue....

Where We Stand, December 2009
The passage of the American Recovery and Re-Investment Act of 2009 (the "Stimulus bill") was the most important action taken by Congress to ease the economic crisis. It provided for $282 billion in tax reductions and $507 billion in government spending including expansions in unemployment insurance and food stamps, and money for education, bridges and green energy projects.

The bill has kept an estimated 6.2 million people out of poverty and created 600,000 to 1.6 million jobs.

But in December, 2009, the economy on Main Street is still grim. Nearly one in five people is either unemployed or underemployed. One in nine families cannot make the minimum payment on their credit cards. One in eight people is on food stamps. One in seven mortgages is either in default or foreclosure. The $75 billion federal program that encourages banks to modify loans and keep people in their homes has permanently adjusted just slightly more than 30,000 mortgages when millions need help. 

Much more needs to be done. In 2010 Congress must immediately pass a jobs bill to create public jobs and provide money to the states to preserve jobs and services. Congress must put in place a more effective program to modify mortgages. Banks must be re-regulated, those considered too-big-to-fail broken apart, and consumer protections strengthened. Most importantly, the economic policies of the past 30 years that brought on this crisis and created an economy where the rich get richer and the poor get poorer must be fundamentally restructured. 

The Recession May be Over But Hard Times Continue

Hunger and Food Stamps:  In late 2009, nearly one in eight people in the U.S. use food stamps, a total of 36 million. This is up by 9 million since the recession began in December 2007. But in 2008, long before unemployment peaked, 49 million Americans experienced "food insecurity." In other words, nearly one in six people did not have "consistent access to adequate food" at some point during the year. This was an increase of 13 million people over the previous year and the highest level ever recorded since the government began tracking this measure 14 years ago. Among children, 23% (nearly one in four) lived in food insecure households, up from 17% the previous year. Even before the recession, more than two-thirds of families with children who were "food insecure" included one or more full-time worker. Hunger is undoubtedly more common now than in 2008. When one in every six Americans isn't sure where their next meal is coming from, something is deeply wrong.

Mortgage delinquencies and foreclosures: In the fall of 2009, one of every seven mortgages (over 7 million in total) was either behind in payments (delinquent) or in foreclosure. Florida, California, Arizona and Nevada had a disproportionate share of the mortgage problems. One-quarter of the mortgages in Florida were at least one payment past due or in foreclosure.

High-quality prime loans with fixed rates comprise the largest share of new foreclosures, a consequence of the large number of people who are unemployed. In past recessions when workers lost their jobs and could no longer make their mortgage payments, they sold their homes. Now unemployed workers are frequently unable to sell and forced into foreclosure instead.

As foreclosures and delinquencies climb, the $75 billion federal program created earlier this year to encourage banks to modify mortgages and keep people in their homes is floundering. In November 2009 the government announced that just slightly over 30,000 mortgages had been permanently modified. When it was created, the program was expected to help three to four million households avoid foreclosure (and many people viewed this as inadequate, even at that time). Congress must create a new program of mortgage modification. The current one, with a price tag of $75 billion, is not working.

The U.S. Economy: What's Happening and What We Should Do About It (A PowerPoint presentation given in a workshop at General Synod XXVII, June 2009)
The current crisis is the culmination of a 30-year decline that had already caused much suffering long before "global economic crisis" became the daily headline. Our public policies and excessive reliance on the "free market" have created an economic system that fails to serve the interests of all people or the planet. Watch the PowerPoint slides that show these economic conditions and suggest how to reverse the long-term slide.

Reflections and Background on the Crisis

In hard economic times, church must proclaim justice, good stewardship by the Rev. Dr. Susan Thistlethwaite

Resources from the UCC's Local Church Ministries on financial wellness, faith, and tough financial times 

A Letter to Members of the U.S. House of Representatives from Rev. Linda Jaramillo, Executive Minister, JWM

Overviews of the Crisis and Recession by Edith Rasell, JWM 

Seek First God's Kingdom, a commentary from from United Church News, April/May 2009

Unemployment and Economic Crisis Tool Kit from Interfaith Worker Justice

General Synod Resolutions

For the Common Good (GS 25, 2005)

A Theological Response to Corporate Greed (GS 24, 2003)

Affirming Democratic Principles in an Emerging Global Economy (GS 21, 1997) 

Affirming Government's Role to Protect the Common Good  (GS 21, 1997) 


Ms. Edith Rasell, Ph.D.
Minister for Economic Justice
700 Prospect Ave.
Cleveland, Ohio 44115