The Dismantling of America's Middle Class

Before I get too far into this blog I don’t want anyone to think that I’m a depressed potentially suicidal individual.

Yes, I have had my moments in the dumps. But generally I am a pretty optimistic guy. My catch phrase in life is: It’s a good life and someone has got to live it.

Still, I can’t help but feel down these days.

The daily news doesn’t help. The government pummels us day after day with more sour numbers on the economy. It is questionable whether the federal bailouts have helped anything, especially in light of the Wall Street fat cats and banking moguls still getting huge bonuses.

It used to be that the Middle Class – that big bulge of our population that represents a majority in this country – could look forward to retirement at age 65 or so. Now the only ones who can afford to retire are the fat cats who have amassed their fortunes on the backs of the Middle Class.

Just before his State of the Union address, President Obama declared that the Middle Class is “under assault.” The unemployment rate hovers around 10 percent and most economists are not sanguine about any return to normal levels until at least 2015.

Yet, Obama’s plan relies on tax credits, a cap on college loan repayments, funds to help working parents pay for child care, forcing employers who don't offer 401(k) retirement plans to offer direct-deposit IRAs for their employees, and a program to help people care for their elderly parents.

All that is well and good but doesn’t seem to take into account the fact that older Americans must work longer in their lives yet they face a shrinking job market and economic uncertainty.

Certainly none of those programs would do much for aging Baby Boomers. The first of that bulging populace comes to retirement age in 2011 facing an uncertain future both in the job market and for retirement.

One cannot help but be pessimistic. The news and the numbers are overwhelming and sobering.

How sobering?

Elizabeth Warren, Harvard University's Leo Gottlieb Professor of Law, conducts an ongoing study of the middle class. She told the Harvard Gazette (Middle-Class income doesn't buy Middle-Class lifestyle): "The American Middle Class is in real trouble. American families are smack up against the wall, financially speaking."

What this means, she says, is that a Middle Class lifestyle just isn’t possible in these rough economic times and many families are going broke trying to attain it. Keeping up with the Jones' is financially breaking the backs of Middle Class Americans.

Even more sobering, Warren says, "We discovered that having a child is the single best predictor that a person will go bankrupt." Warren concludes that by the end of this decade, one of every seven families with children will file for bankruptcy

What does that say for those of us aging in America? It likely points to even harder times for those approaching retirement age where incomes are more likely to be fixed for years to come.

Let's look at another study.

The Center for American Progress and the Service Employees International Union concluded in their recent report “Middle Class in Turmoil”:

– Middle income earnings have been stagnant since 2001

– The skyrocketing costs of health care, college education and transportation leave families with little left over for savings

– These same families are increasingly borrowing in record numbers just to pay their monthly bills

What it all comes down to is an age old adage: The rich get richer and the poor get poorer. As it stands, the Middle Class teeters on the precipice of becoming poorer and poorer in America.

Since the 1950s we’ve had a burgeoning Middle Class in this country. Anything was possible at that time. The Middle Class represented the pride of America. It symbolized the strength of our democracy. It signaled that an aristocracy did not rule this country but that a majority – the Middle Class – truly ruled in America.

Yet an aristocracy began developing here as things started to change in the late 1970s. Since then, with the tax cuts and deregulation of the Reagan era, the welfare reforms under the Clinton administration, and more tax cuts under G.W. Bush – primarily for the wealthy – conservative philosophies have prevailed in this country.

All of it to the detriment of what use to be the pride and strength of American democracy: The Middle Class.

If those political philosophies of the right continue to prevail you can expect to see the Middle Class falter even further into debt and economic turmoil.

So I’m not as optimistic as I was say 10 or 20 years ago but I have to say that it’s difficult not to be pessimistic in the face of mounting political policies and ideologies that seem to take aim at dismantling America’s Middle Class.