We are currently in a time of economic troubles and many Americans are indeed out of work or experiencing financial difficulties. The relative extent of these difficulties can be overestimated, though. If we look, for example, at the report Income, Poverty, and Health Insurance Coverage in the United States: 2010 issued by the Census Bureau in September 2011 we might question whether our present problems qualify this as a time of crisis.
Figure 1 in this report, on page 8, shows us the median household income of major racial and ethnic groups in the United States in 2010 dollars. The striking thing about this figure is that it shows median income, the best measure of the economic situation of the average household, rising for all groups. Today, in our time of troubles, all groups are better off than they were back in the 1970s, 1980s, or even early 1990s. Median incomes did generally peak in the early 2000s, though, and have dipped since then. Part of our perception today, then, involves our comparing ourselves to the high prosperity of the very recent past, rather than to our longer historical background. We should keep in mind, also, that inflation-adjusted dollars may underestimate present-day well-being because they attempt to hold purchasing power constant. But what would be the dollar value in 1975 of such common 2010 goods as a cell phone, an ipad, or a GPS?
It is true that the poverty rate is relatively high today. But is it at a historical pinnacle? Figure 4 in this document shows that there are indeed more people below the official poverty line than ever before. But that is because the population of the United States is larger than ever before. As a percentage of Americans, our present 15.1% poverty rate is lower than the estimated rate until the mid 1960s. The rate has gone up and down since then, but it was as high as it is today in the early 1980s and in the mid 1990s.
Finally, since insurance is such a topical issue today, we might look at Figure 7 to see if it supports perceptions of an insurance crisis. Again, the reason that there are more uninsured people today is that there are more people. Today's 16.3% uninsured is high, but only about as high as it was in the late 1990s and it is not really dramatically different from the low point in 1987. Since this chart only begins in 1987, moreover, we can only speculate that there were many more uninsured people in earlier years. It is true that health care is more expensive today than ever before, but the care also provides treatment that did not exist in earlier years (like those cell phones and ipads). This also means that the overwhelming majority of Americans (83.7%) do have health insurance.
I would not say that we have no cause for economic worry. As I've argued previously, our debt-ridden, demand-side economy raises serious questions about the future well-being of the United States. As we look at our real situation right now, though, we want to avoid exaggeration and excessive alarmism.