Americans are waking up with an ugly headache. They know their heads are hurting but they are not sure why. Everywhere a little piece of what they knew as the ”American Dream” is tarnishing if not outrightly disappearing.
Houses have always been expensive relative to a potential homeowners means. At the height of the housing bubble, houses were even more expensive but for some difficult to understand reason, banks were throwing money at prospective homeowners. For many the American dream of home ownership was possible for artificial and unsustainable reasons.
A college education has occupied a similar place. Ever since the GI Bill of Rights, Americans have approached college education as sort of a right and essential element in finding a good job. Scholarships and low cost loans extended the number of Americans who could afford college. Now suddenly, loans have become expensive and State and Federal support directly to the colleges and universities has sharply decreased. A college education is suddenly outside a lot of people’s reach.
Hospitals (and doctors and medicines) have long been readily available. Illnesses while life threatening were not feared as financial disasters mainly because so many people had excellent employer provided health care insurance coverage. With unemployment at 9+% and many employers reducing their piece of the premium, Americans are waking up to the fact that health care is expensive.
Housing, schools, and hospitals are expensive. What a news flash. Why is there that reaction?
In truth, all three are more expensive than they were a year or two ago. This increase has been magnified, however, because American’s earning power (and potential future earning power) has slipped. Combining these trends, Americans are now finding homes, schools, and hospitals very expensive.
This is not a political problem. This is an economic fact. Making them more affordable could be a political issue depending upon how inclusive one wants the solutions to be. Doing nothing will ration homes, schools, and hospitals to the wealthier segment of the population. Creating jobs, assuming they are good jobs is essential but not sufficient.
Houses, schools, and hospitals all have waste systematically built in. The big question is how can these extra costs be extracted now?
How can a prospective home owner save 20% down when they are earning $30,000 a year or less? How is it possible that some universities cost $60,000 a year while other State supported universities in-state tuition cost $12,000? How is it that one can go to the emergency room with a serious illness and incur a bill of $50,000 while someone else can be admitted and have their insurance company pay?
So, no matter which political party you favor, and no matter what solution that party proposes, unless they clearly identify why things cost what they do and what one must earn in order to afford them, you will be listening to a demagogue whose solutions will have little or no chance of making the American dream more accessible.