Joel Sarfati, a counselor for the Washington area’s long-term unemployed, has seen it all: Foreclosures, substance abuse, family battles and – worst of all – widespread depression that some experts say has reached startling proportions since the recession.

About 9 percent of Americans were defined as clinically depressed in data released last year by the Centers for Disease Control and Prevention in Atlanta, compared to an estimated 6.6 percent in data collected in 2001 and 2002.

“You’re 45, 50 years old, you’ve worked hard for the past 25 years, and all of the sudden you’re on the street, or your friends disappear like unemployment is a disease they can catch,” said Sarfati, the executive director of 40Plus of Greater Washington, an organization that brings together unemployed middle-aged professionals for job training, resume building and much needed moral support. “As this thing gets more drawn out, we see more and more people fall into a deep funk or dark place.”

As President Obama and Republican leaders argue over the best way to reduce 9.1 percent unemployment and revive a near-flatlining economy, less attention has been paid to the widespread emotional and psychological damage caused by long-term unemployment — and the drain it has on government resources and workforce productivity.

With an estimated three-quarters of the 14 million unemployed Americans out of work for more than six months and fully half out of work for more than two years, many jobless Americans are falling into despair as repeated attempts to find work come up short.

When people lose their jobs, they often are optimistic as they embark on a search for a new one, according to Ronald Kessler, a professor of health-care policy at Harvard Medical School and an expert on psychiatric disorders and data. “But after a while they get worn down and discouraged, and that’s when you start to see the mental health problems. And for the U.S., that time is now.”

A recently released, comprehensive study of the long-term unemployed by Rutgers University’s John J. Heldrich Center for Workforce Development found that 32 percent were experiencing a good deal of stress and another 47 percent said they had some stress associated with their joblessness. Moreover, at least 11 percent reported seeking professional help for depression in the past year.

One in two of the respondents in the two-year national study said they have avoided friends and associates, largely out of a sense of shame and embarrassment — a self-imposed isolation that hurt their ability to network to find employment.

Many of these unemployed Americans cannot afford to seek professional help because they lost their employer-provided health insurance with their jobs. At the same time, federal, state and local governments have cut back on spending for mental health clinics and outreach in response to budget crises spawned by the bad economy.

It could get even worse if Medicaid funding of mental health services is put on the chopping block later this fall, as a congressional “supercommittee” hunts for spending cuts to help reduce the federal budget deficit. Medicaid is the main source of funding of public mental health services for young people and adults, accounting for nearly half of state mental health budgets, according to the National Alliance on Mental Illness.

The nation faces “a silent mental health epidemic,” according to Carl Van Horn, a professor of public policy and economics at Rutgers and head of the Heldrich Center.

“Losing a job is more than just a financial crisis for people,” Van Horn said. “It creates numerous other damage, stress, anxiety, substance abuse, fights and conflicts in the family and feelings of embarrassment and depression.”

One case in point is Mark, a 62-year-old printing professional from Silver Spring who is identified only by his first name because of concern that his personal story might turn off potential employers. He says he hasn’t slept through the night once since the printing company where he worked for 18 years announced in May that it would be shuttering its plant.

Five months later, Mark continues to look for work at a printing company but accepts that he may never find another job in the industry he has worked in for nearly 40 years. “It’s sad. It’s unnerving, and I’m not quite sure how to handle everything,” he said.

Mark had always been the breadwinner in his family, but now his wife’s government contract work, his unemployment checks and a dwindling savings account help them keep up with their mortgage and COBRA health-care payments, with little left over at the end of each month.

He has applied for retail sales associate jobs at places such as Best Buy and Sears, but he hasn’t heard back. “I realize now that it’s a reality that no matter what I do, I won’t have what I had before and will have to take a tremendous pay cut if I’m lucky enough to get any job, and that’s depressing. . . . I’ve never felt that way before.”

A 55-year-old former Internet technology official for a Washington area financial service company lost his $200,000-a-year job three years ago. He said he wasn’t worried at first because he was confident he could land a contract to tide him over until he found another full-time job. However, he began to panic when the contract fell through, the economy kept flattening and the competition for the few available jobs grew fierce. “It was very, very bumpy,” he recalled recently. “There were some very depressing periods in there. I’ve never felt such a feeling of hopelessness. You think you did something wrong – it’s my fault. You’re going to live in a dumpster.”

Even the Washington region — which has long been considered recession proof because of the presence of the federal government and has one of the lowest unemployment rates in the country — has not gone unscathed. Virginia, Maryland and the District of Columbia cut their mental health budgets by 9.1 percent, 4 percent and 19 percent, respectively, between 2007 and 2011, according to data from the National Alliance on Mental Health. That spending decline, coming at the height of the recession, placed a heavy burden on local nonprofit organizations and crisis lines.

Tim Jansen, executive director of Community Crisis Services, a crisis hotline in Maryland’s Prince George’s County, said that in the past few months there has been a sharp rise in the volume of calls that he and his 40-person staff have fielded from people experiencing unemployment-fueled mental breakdowns. His staff is hearing more and more about people draining their savings and losing homes after they lost jobs.

“We used to be able to be more of a cheerleader on the phone for people struggling to get work and buckling under that stress,” Jansen said. “But the challenges have piled on top of each other over a series of years and the government’s [role is] fading from view . . . it’s hard to know what to say.”

Research by the CDC, academic institutions and mental health research groups have confirmed a strong correlation between high unemployment and mental health hospital admissions and suicide. According to an April CDC study, the U.S. suicide rate has ticked up every time the economy has fallen into recession since the 1929 stock market crash.

A 2009 survey by Mental Health America, a mental health advocacy group, concluded that the unemployed were four times more likely to report symptoms of mental illness than a working individual. Mental health problems result from mass layoffs and unemployment, but the longer mental health problems go untreated, the less likely it is that a person can find another job, said Harvard’s Kessler.

“There’s got to be some investment not just in job creation, but in dealing with the emotional problems of people who are waiting around until you can create those jobs — or the economy could pay the price,” he said.

Indeed, that may already be happening. According to 2008 data collected by Kessler, mental illness costs society about $193 billion a year in lost earnings from absenteeism and lost productivity. “But given the current economic crisis, chances are that the true costs are now a bit larger than when we made the estimates,” Kessler said. The productivity loss will likely grow higher over the next decade as a greater number of people both demand mental health services from a shrinking public mental health system and suffer from untreated mental disorders, he said.

In the face of an overwhelmed public mental health system, some local nonprofit organizations, including 40Plus, are stepping in to help rebuild the confidence and drive of unemployed people before they reach their breaking point.

Although the group doesn’t offer mental health services, its weekly meetings are highly therapeutic, providing an outlet for professionals to bond, network and focus their career goals.

“All of us have been kicked in the stomach at one time or another,” said Sarfati, the group’s leader. “If you start out down in the dumps, this gives you an opportunity to sort of reposition yourself. They meet others in similar situations, develop relationships, go out for lunch, and all of a sudden there’s a place to go and things to do.”

Sarfati says the attendance at weekly meetings has quadrupled in 31 / 2 years, with as many as 60 people attending.

The organization has helped Tatjana Meerman, a market research professional who was laid off two years ago, to position herself for a career shift from the private sector to the nonprofit development world working with wildlife and environmental causes. The 40Plus group has also helped to mend her wounded psyche after a grueling year-and-a-half of job hunting reaped more rejection than she was prepared to handle.

“Employers told me I was ‘overqualified,’ meaning I was too old,” said the 52-year-old Meerman, who lives in Potomac. “But I’m too young to retire, I’m ready to work, yet I’m being treated like I’m over the hill. That was extremely jarring and very demoralizing, and for a while there, I was definitely skirting depression.”

But discovering 40Plus in May was a game-changer for Meerman, who attends the weekly meetings. She recently completed the group’s intensive job-training program and has landed multiple interviews. “I’m in a very different place now,” she said. “It’s no longer a matter of ‘if,’ it’s a matter of ‘when,’ and for me I think that landing that ideal job will come in the next three months.”

Hirsch is a reporter and Pianin is the Washington editor for the Fiscal Times, an independent news organization that provides original reporting and analysis on fiscal and economic matters.