Student Blog: Law, Markets, & The Role Of The State
THE AMERICAN DREAMERS
When did living the American Dream mean that everyone must own a house or a luxury BMW? I thought living the American Dream meant that an honest day’s work should render an honest day’s pay. I don’t want to sound cliché but there is some truth to the statement above.
Living outside our means has unquestionably been one of the main factors in causing our current economic downfall. Not only are we as people living outside our means, the businesses of America have followed suit. Large companies and banks like Bear Stearns and Lehman Brothers are finding out what the repercussions are for living outside their means. For me, the current economic downturn was caused by two fronts: consumers and banks.
Consumer debt is atrocious. According to Federal Reserve data, Americans carried a total of $627 billion in mortgage and consumer debt in 1974. By 1994 that number had increased to over $4.2 trillion; and by 2004 the accumulated total of mortgage and consumer debt was over $9.7 trillion. In 2007 the total consumer and mortgage debt was nearly $15 trillion – with nearly $12 trillion locked into mortgages and another $2.7 billion derived from consumer spending. (Source: http://Economyincrisis.org.) These high numbers indicate that consumers used banks to fund their lavish or in some cases downright unrealistic lifestyles…and the banks acquiesced.
Is owning a home really that much better than renting a studio above a warehouse that was recently renovated thanks to downtown gentrification? I don’t think so. But then again, what do I know, I live in neither of those places. I live in a condo that was the subject of a foreclosure. In return for helping the owner “repair” the condo, I receive a significant deduction in my rent. So I guess I should thank those of you out there that were American Dreamers, because without you, I wouldn’t be able to live in my nice, cozy condo for such a low price.
COMMENTS
Be the first to comment!
You must sign in before you can comment.
