By Emily Knapp
According to a researcher at the Federal Reserve Bank of San Francisco, the 18-month recession has cost over $7,300 per person in foregone consumption as of May 2011 — that’s an average of $175 a month lost by every American since the financial crisis began. With roughly 309 million people in the country, according the 2010 census, that’s about $2.26 trillion. According to the report, that is the “most severe economic contraction since 1947 as measured by the peak-to-trough decline in real GDP.”
The San Francisco Fed calculated the figure by comparing personal consumption expenditures between December 2007 and May 2011 with those before the crisis. According to senior economist Kevin Lansing, per capita consumption is still down 1.6%. But why such a dramatic decrease in consumption?
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$7300 per person is astonishing. The government definitely needs to do something. $175 a month per American is a lot of money to lose. Pretty soon we will hit the debt wall and we will not be able to borrow anything. That's when Congress will finally realize something should have been done a long time ago.
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