Does America even deserve a middle class? (salaries, statistics, Canada)

[Do a Barrel Roll]

For the past decade, I've seen a decline in American morale. And even though a part of it is beyond control of the average person, from what I've seen, the reactions from most Americans are not any better. Here are my observations of the two reactions that have arose this past decade:

-You have the "nouveau riche" wannabe upper class where most people splurge on items they don't need and can't afford. The new house, the extra SUV, several new 60" HDTVs, etc. Then they end up with either massive credit card debt. And even for those who can afford it, they end up defining themselves and everyone else by their gauche materials.

-And then you have the "proletariat middle class" where people make enough money to have a decent standard of living, but want to live the lower-class hood/barrio/trailer park lifestyle. This can especially be seen with the offspring of these middle class parents. They have decent neighborhoods and households, but end up with the same problems as the lower class (lack of education, teen pregnancy, crime, etc).

I'm not defending neither one and honestly wanted the recession to turn into a depression in order to get rid of these mentalities prevalent in most of the 2000s decade of America's middle class. But with these two mentalities predominate with "middle class" Americans, do we even deserve a solid middle class where narcissism and/or trashiness expected from the more extreme classes is the standard instead of the original middle class characteristics of modesty and moderation?

[Osito]

I guess I don't understand where you're going with the whole "middle-class wants to live lower-class" thing, I'm confused about that one, but maybe that's just me. On to your question; I think the recession will be a wake-up call to those who haven't woken up already. People need to stop living beyond their means and if they don't, they need to suffer the consequences. I think the recession (obviously) made people realize that living their lives on loans and credit cards wasn't the peachy solution they thought it was. But I do hope that the middle-class pre-recession attitudes go away too. Along with Site-To-Store...

[ovcatto]

Originally Posted by Osito

People need to stop living beyond their means and if they don't, they need to suffer the consequences.

I hear this a lot, and considering the present economic situation I'll be damned if I know what that is suppose to mean. The vast majority of folks had mortgages and credit liabilities well within their abilities and expectations based upon their income and investments. The fact that the vast majority of those individuals did not foresee the massive loss of their investments and jobs is no fault of their own. So, if you think that "living within your means" amounts to saving enough money to buy a home in cash, and keeping enough liquidity to account for two to three years of zero income... I don't know what kinds of salaries you think the vast majority of Americans were bringing home.

A few facts:

The majority of U.S. households have no credit card debt, according to the Federal Reserve's latest Survey of Consumer Finances. About a quarter have no credit cards, and an additional 30% or so pay off their balances every month.

Of the households that do owe money on credit cards, the median balance was $2,200 -- meaning half owe more, half less.

Only 8.3% of households owe $9,000 or more on their cards.

As for mortgages:

On a small percentage of all home loans were financed through subprime loans. And before you get all wrapped up in an argument about people buying homes larger than their needs, look at market forces and see the types of homes new home developers were building, what was available in different markets and what prices those markets commanded for even modest homes.

[mateo45]

Originally Posted by The_Fairfaxian

For the past decade, I've seen a decline in American morale. And even though a part of it is beyond control of the average person, from what I've seen, the reactions from most Americans are not any better. Here are my observations of the two reactions that have arose this past decade:

-You have the "nouveau riche" wannabe upper class where most people splurge on items they don't need and can't afford. The new house, the extra SUV, several new 60" HDTVs, etc. Then they end up with either massive credit card debt. And even for those who can afford it, they end up defining themselves and everyone else by their gauche materials.

-And then you have the "proletariat middle class" where people make enough money to have a decent standard of living, but want to live the lower-class hood/barrio/trailer park lifestyle. This can especially be seen with the offspring of these middle class parents. They have decent neighborhoods and households, but end up with the same problems as the lower class (lack of education, teen pregnancy, crime, etc).

I'm not defending neither one and honestly wanted the recession to turn into a depression in order to get rid of these mentalities prevalent in most of the 2000s decade of America's middle class. But with these two mentalities predominate with "middle class" Americans, do we even deserve a solid middle class where narcissism and/or trashiness expected from the more extreme classes is the standard instead of the original middle class characteristics of modesty and moderation?

Regardless whatever the supposed "deficiencies" of the "middle class", what are you suggesting as the alternative.... an even larger gulf between the (serious) problems of the "lower classes", and the lavish consumption of the "upper classes" (with their own set of "failings")?! Although that does seem to be where we're currently headed anyway.

[FW transplant]

The middle class is critical to the success of this country. Historically, having extremely wealthy and poor without a middle class eventually results in revolts by the poor, departure by the wealthy, and possible destruction of a successful economy. Look outside the United States, Canada and western Europe and you'll see what I mean.

Unfortunately in this country, it seems the middle class gets the brunt. The wealthy avoid paying taxes on all of their income and the poor don't have income to tax. Hence, the middle class is unfairly subsidizing both.

So, we not only deserve a middle class, but need a successful middle class to survive.

[Clark Park]

Originally Posted by ovcatto

A few facts:

The majority of U.S. households have no credit card debt, according to the Federal Reserve's latest Survey of Consumer Finances. About a quarter have no credit cards, and an additional 30% or so pay off their balances every month.

Of the households that do owe money on credit cards, the median balance was $2,200 -- meaning half owe more, half less.

Only 8.3% of households owe $9,000 or more on their cards.

Where did you find these "facts"???

Please cite your sources.

The statistic I found was that the average credit card debt per US household is $15,788.

This was a calculation made by the Federal Reserve. See Credit Cards - Compare Credit Card Offers at CreditCards.com: credit card statistics.

[texdav]

Originally Posted by Osito

I guess I don't understand where you're going with the whole "middle-class wants to live lower-class" thing, I'm confused about that one, but maybe that's just me. On to your question; I think the recession will be a wake-up call to those who haven't woken up already. People need to stop living beyond their means and if they don't, they need to suffer the consequences. I think the recession (obviously) made people realize that living their lives on loans and credit cards wasn't the peachy solution they thought it was. But I do hope that the middle-class pre-recession attitudes go away too. Along with Site-To-Store...

Neitehr do I really. it just seems he dispproves of people choces.Of course people who live beyonf their means have always suffered the consequences as they are now. I am not sure sure many where not just reckless meanig that they knoew but ignore the risk like any risky behavior.

[ovcatto]

Originally Posted by Clark Park

Where did you find these "facts"???

Please cite your sources.

The statistic I found was that the average credit card debt per US household is $15,788.

This was a calculation made by the Federal Reserve. See Credit Cards - Compare Credit Card Offers at CreditCards.com: credit card statistics.

Nothing personal, but I'm not going to hunt through your link in hopes of finding your citation.

Anyway the initial basis for my post came from:

The big lie about credit card debt - MSN Money

Which was backed by the American Bankers Association:

Myth: Americans are “up to their eyeballs” in credit card debt

Facts: About 75% of American families have one or more credit cards, but only about 46% of all families carry a balance while 54% pay their outstanding balance in full each month.[1] And while competition has ensured greater access to credit cards, credit card balances as a percentage of total household debt have been declining since the mid-1990s, according to the Government Accountability Office (GAO).

As a percentage of total household debt, credit card balances fell from 3.9% in 1995 to just 3.0% in 2004;[2]

Median credit card balance among families carrying a balance was $2,200 in 2004 (the most recent year this information is available), meaning that 50 percent of families with credit card debt owe more than $2,200, while 50 percent owe less than $2,200;[3]

The ratio of aggregate family debt payments to income has remained stable at roughly 14 percent across all income levels since 1995 and has even fallen for families in the lowest two income levels[4], meaning that American family debt levels relative to income have stayed well within reason for over a decade; this includes low-income families.

Press Room: Myths vs. Facts: Credit Cards

The Washington Post:

The 2004 Survey of Consumer Finances, which does not include business debt, showed that 54 percent of households had no credit card debt after paying their monthly bill and that the average household credit card debt was just over $2,300.

5 Myths About the Poor Middle Class - washingtonpost.com

And directly from the Federal Reserve's 2007 Survey of Consumer Finances not some website for credit cards.

Page A37, credit card balances averaged 3% of total debt, the highest level was in 1998.

Page A45:

The proportion of families carrying a balance, 46.1 per-
cent in 2007, was barely changed from 2004. Under-
lying this stability in the share of all families carrying
a balance were larger shifts for many demographic
groups, with increases and decreases of 3 percentage
points or more for many of the groups.

Overall, the median balance for those carrying a
balance rose 25.0 percent, to $3,000; the mean rose
30.4 percent, to $7,300. These increases followed
slower changes over the preceding three years, when
the median increased 9.1 percent and the mean
climbed 16.7 percent (data not shown in the tables).
Over the recent period, the median balance rose
strongly for most demographic groups, particularly
for higher-income families, childless couples, and
families headed by a person who was aged 55 to 64 or
who was self-employed. However, the median bal-
ance fell roughly 30 percent for the oldest age group,
younger childless single families, and families headed

http://www.federalreserve.gov/pubs/b.../pdf/scf09.pdf

According to the Federal Reserve, 46% if the public carries no balance at all, and the for the rest the median balance was $3,000. As the other stories point out when using averages you are adding our income along with Bill Gates. I feel rather certain that balance on Bill's credit cards is substantially higher than ours.

[The Dissenter]

Originally Posted by The_Fairfaxian

For the past decade, I've seen a decline in American morale. And even though a part of it is beyond control of the average person, from what I've seen, the reactions from most Americans are not any better. Here are my observations of the two reactions that have arose this past decade:

-You have the "nouveau riche" wannabe upper class where most people splurge on items they don't need and can't afford. The new house, the extra SUV, several new 60" HDTVs, etc. Then they end up with either massive credit card debt. And even for those who can afford it, they end up defining themselves and everyone else by their gauche materials.

-And then you have the "proletariat middle class" where people make enough money to have a decent standard of living, but want to live the lower-class hood/barrio/trailer park lifestyle. This can especially be seen with the offspring of these middle class parents. They have decent neighborhoods and households, but end up with the same problems as the lower class (lack of education, teen pregnancy, crime, etc).

I'm not defending neither one and honestly wanted the recession to turn into a depression in order to get rid of these mentalities prevalent in most of the 2000s decade of America's middle class. But with these two mentalities predominate with "middle class" Americans, do we even deserve a solid middle class where narcissism and/or trashiness expected from the more extreme classes is the standard instead of the original middle class characteristics of modesty and moderation?

By this criteria, I would say no.

Our culture glamorizes both the hood and the materialistic lifestyle. I live in a middle class subdivision that has luxury cars and SUVs at nearly every house. Do not even get me started on my experience in the DC area.

[GloryB]

I'm not sure a lack of morality has anything to do with whatever someone's financial class status may be.