Is this economy worse than past recessions?

The source of the current downturn is very different — and may be as difficult to manage.

The current slump began with the overstimulation of consumer borrowing by both the Fed and the financial services industry. We’ve all borrowed to buy houses, cars, college educations, home remodeling, vacations, etc.

Now with home prices falling, we no longer have the home equity to borrow against. We have to pay off the bills from all that borrowing before we can spend again.

Banks are in the same boat: Thanks to deregulation, commercial and investment banks used ridiculous degrees of leverage on investments that turned out to have much less value than they thought.

This would be bad enough without the impact of commodity inflation on a global economy fueled by an entirely new set of players: developing nations. That growth has helped fuel the American borrowing binge, so we’d all better hope it continues. But as long as rapid global growth is the only option, pressure on commodity prices, including oil, will remain high and inflation a very real problem.

So far, the numbers don’t add up to the 1970s: Unemployment is still roughly half where it was then. You can still get gasoline for your car.

The worry is that we’re at the 1972 stage of the 1970s. Within the past month or so, economic forecasters have been pushing back their estimates of when the U.S. economy will recover. We now hear a lot more about a “double dip” — things perk up a bit thanks to the massive stimulus checks and rate-cutting by the Fed but turn down again in late 2008 or early 2009.

The outlook might be more promising if we saw a serious, focused government response. Our energy policy is broken, but after three tries in the past seven years it seems unlikely we’ll get a good one in place before next year.

The housing bill has been debated for a year now: We may get one later this month, but it remains to be seen how badly watered down the final version will be.

Unless the 3 million or so consumers who face foreclosure this year can get back on track, the impact on spending will continue to weigh on all of us. And until home prices begin to recover, the collective assets of American homeowners continue to decline, putting further pressure on consumer spending, which accounts for 70 percent of the U.S. economy.

How many Americans are working two jobs to help cope with gas and food increasing?
— Cheryl G., Willowbrook, Ill.

About 7.8 million Americans — or about one worker in every 20  — held more than one job in June, according to the employment data released Thursday by the Bureau of Labor Statistics. Some of those people may have three jobs or more. The BLS only asks if you work more than one. And it doesn't ask why.

That’s up a bit from last June, but as a percentage of the work force, the number of people working more than one job has held fairly steady since the end of the last recession in 2001.

Unfortunately, all that the extra work — on average — hasn’t paid off very well. Adjusted for inflation, the average weekly paycheck has barely budged since then. That’s one reason American consumers are feeling so stretched: The cost of gasoline, food and other household bills is going up faster than their paychecks.

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