Threat to the American Middle Class

The Democrats this year have put the precarious economic health of the American middle-class front and center of their agenda. Republicans, still are in denial that we have problems.
President Bush continues to press that the economy is strong and that it's the democrats who are painting a bleak economic picture. Republican Rep. Virginia Fox of North Carolina recently declared: "This is not a failed economy. We are not in recession. What a shame that Democrats want to talk down the economy."

This sort of naivete hits the vast majority of Americans straight in the gut. I consider myself part of the middle class as most of the people in the US do. Over the last 10 -20 years it has grown increasingly more difficult financially. Just look around you, the cost of a college education keeps sky-rocketing for unknown reasons, the cost of health-care advances at 15% increases year after year, more people are saddled with huge credit card and home equity debts and then there is the threat of $5 a gallon regular unleaded hovering just over the horizon.

The U.S. economy doubled in size between 1980 and 2007. It's not that all of the benefits of the just-past era went to those at the very top 1% (although a very substantial chunk did); millions upon millions of Americans prospered right along with the super-rich. Now one would think that doubling the size of the economy in almost 30 years would bring much added benefits to the vast majority of Americans in the middle class. However, you would be wrong.

Let's take a look at the way people pay for college education, where rocketing costs and the declining availability of federal grants have meant that most families can no longer pay as they go to send their kids to school, but must borrow. That's left parents more financially exposed. What that has meant is that after they graduate, most young people are saddled with debt and must make a beeline to the best-paying jobs to help defray the costs of college.

Twenty years ago, loans were used to pay about 15% of the tuition, room and board and fees that parents and students paid for college. Today, they account for fully one-third, according to the College Board. That figure is 33%, which is more than double what loans were used to pay (tuition, room and board etc.) 20 years ago.

Similar changes have occurred in health coverage, which costs more today and covers less. In just the last eight years, employees' average annual premium costs have more than doubled, from $1,600 to almost $3,300, according to the Kaiser Family Foundation. Now, ask yourself, has your income kept up accordingly? Has your income doubled the the last 8 years?

For the vast majority of Americans, economic hurdles have become steeper just as the compensation for the super-rich: CEOs, Hedge-Fund managers, business owners keep going up beyond imagination while paying less income tax than middle class Americans. The Democrats realize that this is a problem. The Republicans are all too happy to see the rich keep getting richer.