Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I will argue that we really don't have a solid stable middle class. On the surface we seem to, but I don't think the numbers support it. Numbers about just how much debt load middle class families now carry thanks to college tuition costs, medical bills and other things and banks that outright gouge people on loan interest are absolutely staggering and disgusting. Real wages are a joke now. Seriously. Depending on who you talk to, middle class is somewhere between about $40,000 to $120,000 or so, give or take. Yes, upper middle class is above that number but let's talk about the middle of the middle. The average median family income now sits at about $53,000 or so. If wages were keeping up with inflation from the 1970's onward, we should see the average median family income sitting in the $70,000 or plus figure now. We have people who work two jobs just to stay above water. I call that hardly something a country should be proud of.
We have people who don't understand the plain simple fact from Accounting 101. The simple equation that your net wealth is assets minus liabilities. Let's look at some liabilities.
Liabilities of a 2 person family with 2 children
Credit Card Debt $18,000
College Tuition Debt $50,000 (only including parent's college debt)
Car Loans on 2 cars $30,000 (15,000 on each car)
Medical Debt $15,000
Amount owed on remaining part of mortgage $120,000
Other loans that are personal for furniture, house repairs, etc or other household expenses not on credit cards $10,000
These liabilities alone add up to $144,000. That means that you have to have assets in the amount of $144,000 just to have a net worth of 0. Most people I meet don't seem to grasp this basic idea. They look around and see the decent house, cars, college education, furniture, etc and think they are middle class. I see a debtor class myself. One whose assets are not much if any at all. When you have things bought on credit, you don't own them. You owe on them. Yes, people can have money in IRA's accounts and savings and what not, but few households according to repeated studies show families rarely have savings to get past 2 months without a job.
Yes, I know people are going to nitpick my figures above, but the overall message stands. Middle class is working debtor class, plain and simple. It's also the class with little real wealth for the most part. Yes, some will respond here and tell me these figures are NOT THEM, but we have alot of middle class who these figures are somewhat close.
As I've said, we always hear.. what about the poor and the poor want a middle class lifestyle, but no one ever speaks about the middle class being able to live that lifestyle by being in debt. If they didn't support themselves with debt, they would live the same lifestyle as the poor.
" Why the middle class is held back by college debt, medical debt and predatory banks"
Well yes, everybody is held back by debt, not sure what your point is. Usually medical debt is not avoidable. However, college debt has a lot to do with self responsibility. Predatory banks can be avoided by educated customers.
How many households in the 1970s had both adults working?
Serious question.
College debt is a choice. One can find alternatives to getting a college education without a student loan debt. If one is going for something of value, (doctor, lawyer, etc), one should be able to recoup those costs in short order. For most people, a $50,000 college debt is not required.
Cars make life so much easier, they make everything so convenient. They are not necessities. Public transportation is an option. Moving close to work is an option. Telecommuting can be an option. If one is making enough money that they can be choosy about how they get to work and where they live, they should have no problem affording a $30,000 vehicle. Despite how nice it is to have one, a car is not required.
Too many people buy homes before they are prepared to buy a home. It's not just due to lack of security net, it's also due to lack of any comprehension of everything that is involved, what their rights are, and the fine print. One does not have to have a house. It's a choice to buy a home, it is not required. Therefore, without the non-obligatory home, home repairs are not required.
Credit cards are mismanaged by the majority who want everything now instead of waiting to earn it. "I feel like taking the weekend off, renting a car, going to the ocean, staying a nice hotel, and ordering room service. I have a credit card, I'm going to do this." Most people don't use their credit cards for emergencies, only, like they all say that they will when they get the credit card. It is not necessary to have a credit card. One can get through life without a credit card, therefore, credit card debt is not required.
Why would anyone take out a loan for furniture? That does not even make sense. Save up until you can outright afford it. Oh well, you have to use milk crates for a tv stand for awhile. That should be incentive to work harder to get what you want.
All of the above are "Wants". None of these are "Needs". Yes, they make life more comfortable and convenient...if you can afford them. If you cannot afford them, they don't make life any easier, any more comfortable, nor convenient. In fact, I would say that if you cannot afford them, they actually make life miserable.
Medical bills - Until this country figures out that the free market would work out a whole lot better than anything else, it's in their best interest to put aside an "emergency fund" as well as a "savings" for just these very types of things. The good news is, all that money saved by not having student loan debt, an unaffordable mortgage with home repairs, credit card debt, multiple car notes, and loans for furniture, of all things, will make paying off that medical bill a little bit easier.
In other words, I agree that the middle class does get gouged the most of all taxpayers, and it sucks, but I have no sympathy for people who live well beyond their means and then complain about it. Whether they complain about the bills that they chose to rack up, or they complain that they have to clean their pool, or that their high end appliances need repairs, or they can't decide how to redecorate and it's causing a rift in the family...no sympathy.
College is way too expensive but there is often no need for four years of college. Community college is a good deal.
Cars--most people need cars because there isn't any public transportation unless you can afford to live near it in a city. They don't need an expensive car though--used ones are available for A LOT less. Makes the car insurance A LOT less too.
Furniture--second hand from Craigs List or anywhere. New is really expensive.
Medical bills--we need single payer in this country because no one can totally afford medical bills. Sooner or later they'll get hit with medical bills.
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
27,606 posts, read 14,610,214 times
Reputation: 9169
Quote:
Originally Posted by Three Wolves In Snow
How many households in the 1970s had both adults working?
Serious question.
College debt is a choice. One can find alternatives to getting a college education without a student loan debt. If one is going for something of value, (doctor, lawyer, etc), one should be able to recoup those costs in short order. For most people, a $50,000 college debt is not required.
Cars make life so much easier, they make everything so convenient. They are not necessities. Public transportation is an option. Moving close to work is an option. Telecommuting can be an option. If one is making enough money that they can be choosy about how they get to work and where they live, they should have no problem affording a $30,000 vehicle. Despite how nice it is to have one, a car is not required.
Too many people buy homes before they are prepared to buy a home. It's not just due to lack of security net, it's also due to lack of any comprehension of everything that is involved, what their rights are, and the fine print. One does not have to have a house. It's a choice to buy a home, it is not required. Therefore, without the non-obligatory home, home repairs are not required.
Credit cards are mismanaged by the majority who want everything now instead of waiting to earn it. "I feel like taking the weekend off, renting a car, going to the ocean, staying a nice hotel, and ordering room service. I have a credit card, I'm going to do this." Most people don't use their credit cards for emergencies, only, like they all say that they will when they get the credit card. It is not necessary to have a credit card. One can get through life without a credit card, therefore, credit card debt is not required.
Why would anyone take out a loan for furniture? That does not even make sense. Save up until you can outright afford it. Oh well, you have to use milk crates for a tv stand for awhile. That should be incentive to work harder to get what you want.
All of the above are "Wants". None of these are "Needs". Yes, they make life more comfortable and convenient...if you can afford them. If you cannot afford them, they don't make life any easier, any more comfortable, nor convenient. In fact, I would say that if you cannot afford them, they actually make life miserable.
Medical bills - Until this country figures out that the free market would work out a whole lot better than anything else, it's in their best interest to put aside an "emergency fund" as well as a "savings" for just these very types of things. The good news is, all that money saved by not having student loan debt, an unaffordable mortgage with home repairs, credit card debt, multiple car notes, and loans for furniture, of all things, will make paying off that medical bill a little bit easier.
In other words, I agree that the middle class does get gouged the most of all taxpayers, and it sucks, but I have no sympathy for people who live well beyond their means and then complain about it. Whether they complain about the bills that they chose to rack up, or they complain that they have to clean their pool, or that their high end appliances need repairs, or they can't decide how to redecorate and it's causing a rift in the family...no sympathy.
First world problems.
Getting a credit card is usually the first step to building a credit history. Without a stable credit history, good luck ever getting a business loan or mortgage. And be realistic, 95% of the population are not paying for a condo or house with cold hard cash
Getting a credit card is usually the first step to building a credit history. Without a stable credit history, good luck ever getting a business loan or mortgage. And be realistic, 95% of the population are not paying for a condo or house with cold hard cash
You don't "need" a house. That's a "want".
Many businesses start off with hardly any money and get supported through investors, not loans.
Many businesses start off with hardly any money and get supported through investors, not loans.
Many Americans "need" a house if they hope to be able to retire someday. I believe that my inability to buy a home will prevent me from being able to ever afford to retire. Rent consumes half my income, so I will have to keep working until I drop. If I owned a home, I'd have equity by now, plus the mortgage payments would eventually stop. Rent never ends.
Investors don't fund burger flippers who aspire to start a business.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
