But then what? In 2009, a central quandary for the next president, particularly if it is a Democrat with healthy Democratic majorities in both houses of Congress, will be how aggressively to push an agenda that calls for greater government spending and higher taxes.

In advancing those goals, the sense that the economy is doing poorly cuts both ways. It adds to the crisis atmosphere that encourages an activist government. But it also tends to make middle-class voters want to protect themselves and wary of being asked to dip into their pockets to finance programs for those in need.

And the Republicans are likely to take aim at Democrats over rolling back the Bush tax cuts and suggesting wholesale tax increases, like Senator Barack Obama’s plan to make more income subject to Social Security taxes.

“It puts Democrats in a bit of a political bind,” said Stephen Rose, a moderate Democratic economist who has challenged some of the conventional wisdom on the left about the reasons behind the increasing anxiety of the middle class.

With the stimulus package that Congress just passed, it is clear that Democrats, while determined to spread the largesse as broadly as possible, are particularly focused on appealing to middle-class voters.

Benjamin Friedman, an economics professor at Harvard, notes that incomes for the majority of American households, adjusted for inflation, have slipped despite the overall growth of this decade. While a recession is a relatively short-term event, Friedman adds, it is likely “to focus people's minds on a stagnation that has been under way throughout the decade.”

... contd.