This chart from Bill McBride at Calculated Risk shows one reason why the economy is still sputtering along: Because Americans are still making much less money than they were before the recession.

The chart shows real personal income (adjusted for inflation) minus "transfer payments" as a percent of the total before the crash. Transfer payments are welfare payments, unemployment insurance, and other government subsidies. When transfer payments are included, the income picture looks better, but of course those transfer payments are just more government spending.

The chart also shows how much more devastating the recent recession was than other recessions for the past 50 years (click for larger):

Calculated Risk

Why is personal income so lousy?

Because employment still hasn't recovered to pre-recession levels. Here's a second chart from Calculated Risk showing current employment as a percent of pre-recession employment.

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