The degree to which rising living standards link to happiness is something I want to return to at a later time (it’s complicated). But capitalism has always liked to keep score using money-based estimates of wealth and income. On both counts, something isn’t working for most U.S. citizens. The U.S. Census Bureau’s net worth numbers are below (hat tip to Early Warning, click for larger image, link to Census Bureau report here):
Of course, the housing slump appears to have done most of the damage. So if the housing market rebounds everything will be OK? Maybe. Unfortunately, median income trends appear more entrenched and just as dire (click for larger image, link to Census Bureau report here):
For those with hazy stats, if you put all American households on a line from poorest to richest, the median would be the one in the middle. Unlike the mean, it is not skewed upward by such U.S. oligarchs as Bill Gates, Warren Buffet, Larry Ellison and the Koch brothers. Welcome, most Americans, to a post-growth world.
Risk and Well-Being 
Are we seeing the end of growth or a new way to allocate wealth to fewer people with time? I think the former is the case. Our economy continues to grow, but that isn’t reflected in real take-home income or higher wealth for an increasing number of Americans.
In reply to your first question: both. The U.S. economy in aggregate is growing, just, but the rate of growth has declined substantially. This, combined with the concentration of the fruits of growth into an ever-narrower segment of the population, has been brutal for a large section of the population. Personally, I think the head winds for aggregate growth will continue to mount, so more and more Americans will experience shrinking net worth and real income. So the challenge of living in a post-growth world will push further into the middle and upper-middle classes.
Of course, everything is much bleaker here in Europe in purely growth terms.
I think there are policies that can help respond to this, but their success can’t be measured in purely GDP terms. The traditional left response of Keynesian pump-priming and redistribution is as defunct as the right’s market liberalisation, free trade and low taxation.