Dave Pollard's environmental philosophy, creative works, business papers and essays.

trust your instincts

< £ Salon Bloggers & >

	October 17, 2003

THE BANKRUPTING OF THE AMERICAN MIDDLE CLASS Another great article from Salon's Katherine Mieszkowski reviews The Two-Income Trap: Why Middle-Class Mothers and Fathers are Going Broke, a new book by Harvard Law Professor Elizabeth Warren and her daughter. Highlights: The greatest predictor of bankruptcy in America today is having children. In the last generation, the typical family has become a two-income family, with 75% more income, but costs that have far more than doubled, making job loss by either parent, or family breakup, or medical setback (for anyone in the family, including, increasingly, dependent seniors), economically disastrous. The costs that have risen most are mortgage, health insurance, car, preschool, after-school care and college. Spending on basics like food, clothing and furniture have actually dropped 20% for the average family with children in the past generation. 'Excessive consumerism' is a total myth. Home mortage foreclosures are up over 300% in a generation. The average mortgage rate in the US is 16%, ten points above prime, reflecting the huge increase in second and third mortgages and the number that attract rates in the 30% due to missed payments as a result of financial difficulties. One in 12 Americans with mortgages loses their home to foreclosure. The huge differential in house prices in areas with highly-rated schools (where residents' children get priority placement) is a major factor in couples over-extending themselves and ending up bankrupt. The shame and stigma over personal bankruptcy is so great that those affected are unwilling to seek political action against usurous lenders and other contributors to the problem, or even acknowledge or talk about it publicly. This is another consequence of the 'privatize and deregulate everything' mentality that is destroying the American middle class, and millions of families in the process. Public education, transportation, and health infrasructure has crumbled in many areas to the point where it is not only unreliable and poor quality, but even dangerous. As a result, families with incomes that would have once allowed them to live comfortably are now pushed to the limit trying to afford vastly more expensive private alternatives. And the outrageously high interest rates they have to pay to mainstream financial institutions are illegal in most first-world nations, where sensible regulation of such excess still prevails. 9:35:08 AM  trackback []  comment []

© Copyright 2004 Dave Pollard. Last update: 19/02/2004; 2:55:02 PM.