I’ve been a pessimist about the chatter about "recovery" and the foragers who seem to keep finding "green shoots" everywhere. I understand why the Administration has to trumpet any hopeful signs–it’s a political neccessity. But, I have pointed out repeatedly that I don’t see how we have a "recovery" given how deeply stressed out people are about shrinking bank accounts, no real pay raises (that goes back over 30 years) and, finally, a huge debt burden.

   And The Wall Street Journal agrees this morning on the last issue when it explores why a great deal of doubt is floating around about a "recovery":

That is what is in doubt, and one word explains why: debt. Despite an uptick in consumer saving, debt levels have only barely begun to come down. Even after the recession ends, economists expect the gradual reduction of the nation’s massive consumer debt to take years. In the meantime, they are warning that the economic-growth surge expected for the second half of this year could be followed by slower growth and a softer stock market in 2010.

   And…

Consumer borrowing fell in June for the fifth consecutive month. The savings rate, which had fallen below zero in 2005 as a profligate nation spent more than it earned, was back to 6.9% of disposable income in May. It pulled back to 4.6% in June, but as people struggle to repay debt, many economists expect the savings rate gradually to return to the 7% to 10% range of the post-war years.

"Consumers are under significant financial pressure," Goldman notes in its report. "The weakness in household income — partly resulting from the sharp slowdown in hourly wage growth — will make it harder to raise saving without significant constraints on consumption."

As for home building and capital spending, two other possible growth motors, "we do not expect a ‘traditional’ rebound in these sectors, largely because the overhang of unused capacity in both the housing and business sectors remains enormous," Goldman said.

   Of course, the logical reaction might be to say: we need a massive effort to reinflate pay checks for people and only unions can bring that to fruition. Yeah, fantasy talk.