If you read the news (God help you if your main source is TV “news”), you’ll be thoroughly confused by the conflicting economic reports. For one thing, you’ve got Tim Geithner telling you that everything A-OK and we’re on the way to complete economic recovery, albeit very slowly. Sorry guys, I voted for Obama and will again, but that just isn’t true. I can only guess CNN doesn’t have anybody who knows what to think since their coverage is about the possibility that the Fedwill mention the possibility of deflation. Their article is so pathetic I hesitate to even link to it. Krugman doesn’t yet say that it will occur, only that indicators are heading in that direction. The Fed is divided with some arguing for preemptive acts against deflation and others saying such fears are unfounded.

Of 10 current members on the committee, two are openly concerned about inflationary risks; three, now including Mr. Bullard, are somewhat worried about deflation; and five centrists, including Mr. Bernanke, have not expressed a firm leaning either way.

Now even private sector economists are getting in on it.

Mr. Hatzius is arguably Wall Street’s most prominent pessimist. He warns that the American economy is poised for a sharp slowdown in the second half of the year. That would send unemployment higher again and raise the risk of deflation. A rare occurrence, deflation can have a devastating effect on a struggling economy as prices and wages fall. He says he may be compelled to downgrade his already anemic growth predictions for the economy.

For months, Mr. Berner has been sticking to a more optimistic forecast, despite growing evidence in favor of Mr. Hatzius’s view.

In short, it’s probably the case that it’s too soon to tell. Either we have severe prolonged period of growth so slow it’s negligible or we actually have deflation. For an explanation of why that’s a bad thing, read this.

On the other hand, we do have a clear picture of what’s going on with employment. In short, it sucks.

Many economists are forecasting a further slowdown in the second half of the year, perhaps to an annual rate as low as 1.5 percent. That is largely because businesses have refilled the stockroom shelves that were whittled down during the financial crisis, and there will not be much need for additional orders.

Additionally, the fiscal stimulus measures that have propped up growth are expiring. Proposals for individual programs like another expansion of unemployment benefits have been beaten back each time they have come up in Congress.

“We need 2.5 percent growth just to keep the unemployment rate where it is,” said Christina Romer, chairwoman of the president’s Council of Economic Advisers. “If you want to get it down quickly, you need substantially stronger growth than that. That’s what I’ve been saying for the last several quarters, and that’s why I’ve been hoping that we’ll please pass the jobs measures just sitting on the floor of Congress.”

Yeah, no joke! If you keep in mind that the “recovery” was no more than an aberration brought about by the anemic stimulus package (and census hiring), we may actually be sitting on a plateau of unemployment right now. If GDP growth continues to shrink and falls significantly under that 2.5%, we’re going to see unemployment rising and rising. That’s going to be hard on people. As a matter of fact, there’s a measurement for this:

Using this measure, Hacker and his colleagues determined that the proportion of Americans economically insecure in 2009 and 2010 was higher than at any time in the last 25 years. This reflects the impact of the recession, obviously, but it’s also indicative of a long-term trend towards greater vulnerability. The percentage of insecure Americans was 13.7 percent during the recession of the early 1990s and 17 percent during the recession at the beginning of the last decade. For this recession, it’s 20.4 percent. (Note: That’s a projection, since not all the relevant data is available yet.)

Vulnerability is the key word here. There are a lot of people struggling because there simply are no jobs to be had, not even at minimum-wage fast-food joints. There’s no government work program. Not everybody can join the military (because they’re not eligible, not because of moral objection). If you lose your job in this recession, not only are there no immediate prospects; there’s no likelihood of there being any prospects at any point in the near future (and by near we may be talking in excess of five years). Nobody thinks the economy is going to turn around in the near future. Even if it did pick up, there are just a lot of jobs that have disappeared for good. The landscape of the American economy is changing and it’s going to leave a lot of people behind. I’ve discussed that before in other economic posts.

And last but not least, the suffering continues as people get dropped off of unemployment.

In June, with long-term unemployment at record levels, about 1.4 million people were out of work for 99 weeks or more, according to the Bureau of Labor Statistics. Not all of them received unemployment benefits, but for many of those who did, the modest payments were a lifeline that enabled them to maintain at least a veneer of normalcy, keeping a roof over their heads, putting gas in their cars, paying electric and phone bills.

As a small aside, I reject the idea that “normalcy” is the proper word. It sounded wrong when Warren G. Harding dragged it out and it sounds wrong now. ”Normality” is what I normally use. Anyway, while you have conservatives (although what makes them conservative anymore I have no idea) and perhaps some libertarians arguing vehemently against unemployment benefits, these people are actually becoming homeless. Do you know how hard it is to get a job with no address, no phone, and no transportation? It’s pretty damn hard.

I know that we have to keep going on and plugging away regardless of whether the economy turns around any time soon or not, but it’s hard to believe we’re going to return to better times. As we finally learned to our great disappointment, the good times we were living in (well, many of us were living in) were fueled by credit. That day will not return. The low-education, high-wage jobs people had 40 years ago are gone, never to return. Education isn’t cheap (and for the best jobs it isn’t easy) which is why many people skip it on the assumption they can go out and get a job pays well. That’s not going to be possible for many people in the future. And who can be saddled with 30, 60, or even 100 thousand dollars of debt for an education when they can only get a job that pays $35,000 a year?

It’s time to face reality that the way we live is broken. It’s time to change things and yet our politicians lack the courage, conviction, or willpower to quit politicking and actually do something about it. To my liberal brethren, I say we must kick our own party members in the pants until they act for our benefit, not to further their own chances of reelection.