The End of the American Dream
Was It a Myth, Is It Dead, or Simply Evolving?
Is this the end of the American Dream? For most, the American Dream is stable economic growth, better jobs for our kids, and retirement at 65. Thanks to the Great Recession, it now seems no longer attainable for many. Did the worst recession since the Great Depression kill it? Or was the American Dream just a myth? The recession forced us to rethink today's American Dream and return to one envisioned by our country's founders.
The Myth of the American Dream
The economy before the 2008 financial crisis relied on debt and derivatives. Debt said, "Eat, drink, and be merry... you don't have to pay until tomorrow." Derivatives said, "Trust me. Your investment will increase in value." The derivative bubble burst with the financial crisis. All we have left is the debt: $26 trillion in federal debt and $4 trillion in consumer debt. Combined, that's much more than the U.S. gross domestic product of $21 trillion.
Other statistics sounded an alarm. Years of high unemployment led to underemployment for those who were working. It led to long-term unemployment for those who weren't. Also, gas prices remained stubbornly high even though oil prices dropped. That created high food prices and health care costs. In 2010, the White House Task Force on the Middle Class reported, "It is more difficult now than in the past for many people to achieve middle-class status because prices for certain key goods — health care, college, and housing — have gone up faster than income."
Even before the recession, most Americans had lost hope in the Dream. A 2004 survey found that two-thirds felt the Dream was becoming harder to achieve, especially for young families. They blamed financial insecurity, poor quality education, and even the government itself. More than 30 percent felt they weren't living the Dream, and nearly half thought it was unattainable for them.
Is the American Dream a myth? Research shows that the best route to high income is education. But the United States has lower rates of income mobility than other developed countries. America scores lower than France, Germany, Sweden, Canada, Finland, Norway, and Denmark. The researchers concluded that the idea of America as the land of opportunity was misplaced. Sociologist Richard Wilkinson commented that "if Americans want to live the American dream, they should go to Denmark."
Pulitzer-prize winning journalist Chris Hedges echoed this sentiment. In his 2012 book, "Days of Destruction, Days of Revolt," Hedges said,
"The vaunted American dream, the idea that life will get better, that progress is inevitable if we obey the rules and work hard, that material prosperity is assured, has been replaced by a hard and bitter truth. The American dream, we now know, is a lie. We will all be sacrificed. The virus of corporate abuse - the perverted belief that only corporate profit matters - has spread to outsource our jobs, cut the budgets of our schools, close our libraries, and plague our communities with foreclosures and unemployment."
Rising income inequality created a sense of hopelessness and frustration. In 2005, the top 1 percent of workers earned more than the bottom 40 percent put together. One-fourth of Americans made less than the federal poverty level. When adjusted for inflation, most Americans made less than they did when Bill Clinton was president.
Income inequality meant that many tried to attain their version of the American Dream through credit cards. In her book, "Did You Buy the American Dream?" author Jean Riall said, "Somewhere along the way, we decided we deserved everything, all at once. So we bought it on credit."
The Death of the American Dream?
Others believe the American Dream, while once alive, is now dead and buried. As a result, they predict U.S. economic collapse. For example, "The End of the American Dream" saw slow economic growth as proof that the recession never ended. It just took a break until the second Great Depression. They warned that China's growth would eclipse that of the United States. Then the Chinese will tell Americans what to do. They also see social trends as proof that the American Dream has died. That includes epidemics of obesity, child abuse, and drug addiction.
It's true that global economic conditions have changed. Now governments can't afford to give everyone the financial American Dream. But our Founding Fathers envisioned that government would provide the opportunity for everyone to work toward their vision of happiness. They never intended for it to provide world dominance and the guarantee of a good life.
The New American Dream
Are we headed for an extended lower standard of living? Perhaps the old American Dream based on material wealth is unsustainable. But is that so wrong? Unemployment freed many from jobs they hated anyway. Fewer loans meant we relied less on banks and more on each other. The crowd-sharing society returned us to our core strength. That's reliance on each other instead of the government.
Board of Governors of the Federal Reserve System. "Consumer Credit - G.19." Accessed July 2, 2020.
U.S. Department of the Treasury. “The Debt to the Penny and Who Holds It.” Accessed July 2, 2020.
Bureau of Economic Analysis. "National Data: National Income and Product Accounts: Table 1.1.5 Gross Domestic Product." Accessed July 2, 2020.