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Scary Tales

Nov
2
2007

Halloween’s over for another year, and I hope no one was too frightened. As adults we can pretty much handle those bobbing, plastic bats with the light-up eyes that hang from the ceiling. No, you really want to scare an adult, let’s talk about a truly terrifying subject: family finances.
Aaaargh, noooooo.
Oh, buck up. We all know if the middle-class family is having any financial problems it’s just because they’re tossing down too many fancy coffee shop lattes. Cut out the little indulgences, and watch your savings add up, financial advisers lecture.
Now, that’s an idea that certainly has merit, but it’s also why I thought this MSNBC article was interesting (despite the truly scary series logo and name – Gut Check America – creepy!). It says that middle-class families aren’t feeling squeezed financially because they’re a bunch of shopaholic, self-indulgent latte-sippers. Rather, they’re feeling squeezed because the basic components of a middle class budget are – more expensive.
Big-ticket items like housing and a college education have increased much faster than salaries and inflation in recent decades – and there’s a whole new huge expense of child care, to enable the two earners necessary for the whole enterprise. Health care costs too are part of the bite, according to the article.
Housing costs, at least on much of the U.S. coasts and some points in the middle, have soared way out of proportion with average salaries – not everywhere, of course, only the places where more people want to live. Now, house prices are dropping in many of those outrageous areas, meaning homeowners have lost that feeling of wealth from thinking of their house as a constantly rising asset to be tapped as needed, with the drag on the economy that entails. But even so, for people hoping to buy a home, prices still haven’t dropped to what anyone should consider reasonable.
College costs are equally or more ridiculous. In Spain, many families feel as pinched or more about the gap between salaries and home prices, but there’s one expense they don’t worry about: college education is state funded, essentially free or with only nominal charges. Imagine what your family budget might feel like if you didn’t have to worry about possibly having to come up with $200,000 per kid just to help them get what’s considered a basic education these days.
Certainly with colleges there are cheaper options, and community colleges (in some cases a great educational value) and state schools (not that they’re always so cheap) can provide an excellent education; you’re just giving up the prestige value (and whatever networking advantage might translate to careers) of the fancy-pants schools. For homes too, you can buy what you can afford, but that’s at a greater and greater sacrifice – of space, or by having a huge commute, or living in what are considered worse public school districts, or you find a job somewhere else and move to a whole different location. And that’s all part of what an economist quoted in the MSNBC article meant when he noted that Americans are no longer sure that the idea that each generation can do better economically than its parents is true.
Two New York Times columnists recently pointed to Hillary Clinton as the presidential candidate who is looking at these economic issues they see as vital to voters. While Democratic candidate Chris Dodd does focus on child care, Clinton is the only other candidate to have even mentioned it, says columnist Gail Collins. And Judith Warner writes that Clinton’s attention to middle class needs means her “surprising” lead shouldn’t be so surprising.
I’d agree that these money issues are something that you’d think would be relevant with voters – just don’t expect to see them talking about it over a latte.

Share  Posted by Deborah Klosky at 12:57 AM | Permalink

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