Wednesday, February 11, 2015

What Happened?

My great-grandfather was a blue collar worker.  He worked hard, he owned a house, and he and his wife raised 10 children.  They were never wealthy, but they had everything they needed.  But both of them were able own a home, have as many children as they biologically could, and ultimately retire with some amount of income from Social Security.

My grandfather grew up poor, was able to become an engineer, had six children with his wife, and ultimately died in a mansion home.  The home was fully paid for and thus my grandmother was left with a large equity that she was able to leverage when she downgraded to a smaller home.

My father grew up in a middle class household with his five other brothers and sisters and earned a chemistry degree.  He worked in environmental clean-up for most of his life and was able to own a home from when I was a young toddler onwards.  The main house I grew up in was bought for 85K.  My parents are now living in a much nicer home, but not a mansion.  Both my parents worked while I was growing up but my father is now unemployed while my mom is the manager of the Physical Therapy department in a hospital.

Today, my wife and I live in a two bedroom condo that we rent from a private owner.  We have one child (so far) and while I make twice the national average in salary, I am unable to afford a home.  In order for someone like me to buy a home, I would have to have at least 60K as a down-payment.  That is because the average cost of a home in my area is around 300K and 60K is 20%.

What happened?

How did this country go from allowing the working poor to afford a modest home and be able to raise 10 children to being in the upper middle class and unable to buy a home or have as many children as you want?

I imagine that there isn’t one single factor here.  The rise of free trade, the introduction of women into the workforce, inflation of the currency, and the rise of the parasitical financial sector are all contributing factors.  The stigma of having children in our society (as Jim Gaffigan remarked, having four children prompts people to ask when you are done), the rise in divorce rates, the lose of collective faith and thus our common culture are also huge factors in this as well.  And don’t forget about the ever growing size of the government.

The fact is, our country’s cost of living has skyrocketed to unsustainable levels.  The only response the government makes is to subsidize the poorest of the poor while fleecing more and more money from productive citizens, both current and future.

But the solutions are complex.  We have a complex problem and simply eliminating the Federal Reserve or raising the minimum wage will not solve it.  Honestly, I’m not sure if we could solve the major issue before a huge collapse happens.

The next 50 years are probably going to suck for Americans.  But if we do things right here and now, perhaps things will be even better than they are now in 100 years.

And there I go being all hopeful and optimistic again.