The "living beyond our means" argument, with its thinly-veiled suggestion of moral terpitude, is technically correct. Over the last fifteen years, average household debt has soared to record levels, and the typical American family has taken on more of debt than it can safely manage. That became crystal clear when the housing bubble burst and home prices fell, eliminating easy home equity loans and refinancings.How typical of the Republicans to ignore the middle class... again.
But this story leaves out one very important fact. Since the year 2000, median family income has been dropping, adjusted for inflation. One of the main reasons the typical family has taken on more debt has been to maintain its living standards in the face of these declining real incomes.
Tuesday, October 14, 2008
Robert Reich on blaming the victims
Robert Reich, one of my favorite economists, talks about the victim blaming happening on the Right these days. The meme that American families are living beyond their means leaves out a critical element of the equation: stagnant wages.