Jan. 5, 2012 at 3:01 PM ET
RED TAPE BRIEFS
Perhaps this is why we keep talking past each other.
In today's New York Times, Jason DeParle did a great job of exploring a new angle to the tired debate about the real problem with the American economy -- a decline in upward mobility, which once upon a time was a defining characteristic of the American way of life. While liberals and conservatives argue over poverty.
This decline is also a good starting point for discussion about what's wrong with our country, because there's plenty of room for agreement across the political spectrum. While liberals and conservatives argue about the effectiveness of providing aid to the poor, experts on both sides have noticed that many lower and middle class Americans are suffering from stagnation -- and agree that must be fixed.
I'll state it more plainly. Our economic malaise isn't about poverty, it's about being stuck. In fact, it's about nearly everyone being stuck. A Red State-Blue State fight to the death over extending unemployment benefits is a poor proxy for discussing the real problem. The first politician to realize this will really be on to something -- perhaps a unifying theme that could move us past the current poisonous state of partisan politics.
We can all agree that America isn't America without the Frontier spirit, the social contract that if you work hard, there's a brighter tomorrow. That spirit is in serious danger... right now.
In my opinion, here's why: Housing costs eat up more than twice a family's monthly budget today than budgets of a generation ago. Here's some data points: . A 1975 Census report showed that only 8.9 percent of mortgage holders spent 35 percent or more of their income — including insurance, property taxes, and utilities — on housing. In 1999, 26.7 percent of U.S. households were considered house poor by U.S. Census Bureau standards, or spending more than 30 percent of income on housing. By 2006, the number had jumped to 34.5 percent. The bureau also found that 46 percent of renters were "house poor" that year, paying 30 percent or more of their income on housing costs. (For much more on why life really is harder now, see this story. For more housing cost data, see this PDF at the Census Bureau site. The Bureau offers no more up-to-date data).
This extravagant increase in housing costs trumps any other data point you can find. It has created an unsustainable burden, and more important, it has glued families to their current homes and severely restricted labor mobility. You can't take that great job offer in another city if there's no hope you'll sell your current home. Meanwhile, just where are young married couples who want to have a third child supposed to live?
Until we fix this, upward mobility will be severely hampered, and the American Dream will be, if not dead, in a coma.
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