As times have changed so has the nostalgic “American Dream”. For many the American Dream is more like an inhumane nightmare perpetuating systems of debt and false senses of security rather than freedom and ownership. To criticize the ideals of this American Dream would be a pointless waste-of-time; however, when you compare it to the everyday realities that so many citizens go through…maybe it’s worth reevaluating.
The Failing American Dream
Household and Income
The days of the well-paying one income household (with the two kids, dog, and a picket fence) has recently been replaced with people fleeing into apartments because of unbearable thirty year mortgage payments. Now with this migration one would think that the price of homes would go down. In reality though the prices of apartments have just been on the rise. According to authors Kathryn Vasel and Tal Yellin in their piece “Where Rents are Rising the Fastest” nationwide rents rose 4.3% in May” this year. (At the time of this posting the market is currently reverting back to its previous state. Hopefully we all have learned a lesson from the crash; however, according to a few experts some companies have reverted back to risky loan practices). The image on the right illustrates the effect of an increased interest in apartment rentals and its effect on housing industry. The key really is making home ownership more lucrative and safer.
The previously mentioned one income household has turned into couples now needing two incomes-just to make the minimum payments for their multitude of debt. In an article discussing median household debts; author Frank Bass reported that “the total median household debt hit its high[est] of $74,619 in 2010”. From the year 2000-2011 “the typical secured debt for households (between age 35-44 years old) rose from $97,917 to $128,500”. That is an increase of 31.2%. This culture of debt has not just affected those with children, but has changed the mindset of those in relationships in general. How? It has become commonplace for many men and women to put off getting married and having children-not because they’re not in love-but because of the stigma that weddings and children have as being “financial burdens”.
From Luxury to Necessity
It’s almost impossible to think that many of the items that we view as necessary to survive in today’s economy were actually considered luxuries when first introduced. The topic briefly discussed in this section will be credit cards. Credit cards transitioned from a luxury item to a must-have, as individuals need to have great credit scores in order to make simple purchases without paying ridiculously high interest rates. In the article The Evolution of Credit Cards, “The history of credit cards began in the farming communities of the early 20th century.” According to Lewis Mandell, who is also quoted in the above mentioned article, “When we were more of a farming nation we were driven by credit. Every sort of general store in the more rural regions extended credit to farmers…The more farming-oriented a society was, the more dependent they were on consumer credit.” In this particular instance it makes sense. If a merchant lent farmers seeds-the farmers could grow the seeds, sell the crops, and use the money pay back the merchant. This would allow the merchant to purchase more seeds and continue the cycle. This is the same cycle used today by banks (i.e. business loans) because in theory this seems like a great idea until you take into account interest rates. Originally there were state laws that “prohibited banks in one state from lending money to people in another. States set their own interest rate ceilings, so an out-of-state bank couldn’t lend at their own higher rates to another state’s citizens.” Of course this was appealed in the Supreme Court case Marquette National Bank of Minneapolis vs. First of Omaha Service Corp. which according to Pat Curry (author of How a Supreme Court ruling killed off usury laws for credit card rates) “The Supreme Court ruled, essentially, that state usury laws don’t apply to nationally chartered banks based in other states. Plus, nationally chartered banks can ‘export’ the interest rates allowed in their own states to customers throughout the country.” Basically instead of states competing against each other-leading to lower interest rates; banks moved, became chartered by the federal government and interest rates increased dramatically. Which is why nowadays you have to have an excellent credit score-not to get approved for a loan-but to get a reasonable interest rate!
Have you ever overheard an older person say something like ‘I remember when [insert food here] was twenty-five cents when I was growing up’? Well, if you think about the price of food is also an important aspect of the American Dream-there is no point of having a family if you can not feed them. Unfortunately, the cost of food has steadily been on the rise-a trend that is most likely to continue in the future. “Meats, particularly beef, are among the food items which saw the steepest rise in price, with beef and veal rising 16.7% since January of 2014” according to Katey Troutman in her article From Farm to Table: 6 Reasons Why Food Costs So Damn Much. Now there are plenty of reasons why food prices are going up ranging from inflation, competition, increased oil prices, etc. but at the end of the day when is it time to say enough. Our organic/freshly farmed food has been replaced with chemically-processed/GMO alternatives. Why? According to the companies it was to meet the demands of the consumers. But according to an consumerreports.org article “More than 70 percent of of Americans say they don’t want genetically modified organisms in their food.” In a more recent poll done by ABC news it was determined that when it came to GMO foods “52 percent [of Americans] believe such foods are unsafe, and an additional 13 percent are unsure about them.” So why don’t more people just by organic? Unfortunately, once again it comes down to the cost of food; a point that was illustrated in a scene from the documentary Food, INC when a family was showed making food decisions solely based on price-not nutrition.
If you noticed all of the points mentioned had a financial aspect that prevented the full achievement of the dream. From owning a home, having children, even getting food-it seems that for many chasing the American dream leads to nothing but a cycle of systematic debt. The traditional American Dream is exactly that traditional…old, outdated. The NEW American Dream for so many people today is simply working hard to scrape up enough money just to get by.
Featured Photo credit: outburstscartoons.files.wordpress.com/2011/03/american-nightmare08.jpg
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