Lots of interesting stuff here, data, charts and poll responses.

Inside the Middle Class: Bad Times Hit the Good Life



The report hits hard in this area talked about by Dr. Hudson:

The economic structure and industrial competitiveness of the US has gone way down, largely because the inflation of housing prices and the heavy debt service has raised the cost of living for American families and businesses.
a couple of excerpts:

As Americans have seen the values of their homes rise over the past two decades, they have increased the size of their debt. This is especially true for those in the middle income group.

In every way that can be measured -- size, value, source of wealth, collateral for debt -- the American home bulks larger than ever in the economic life of the middle class (and the nation as whole). A new single-family home is about 50% bigger today than a new home was a generation ago. The median sales price of existing single-family homes has risen in inflation-adjusted dollars from $142,578 in 1983 to $223,362 in 2007.10 However, while homeowners have seen the value of their biggest asset rise sharply, they have also leveraged their homes to take out ever more debt. This is especially true for middle income families, whose overall debt-to-asset ratio rose from .25 in 1983 to .40 in 2004. Their increase in debt burden was much greater than that of the upper income group (it rose from 0.21 in 1983 to 0.27 in 2004) and slightly greater than that of the lower income group (for whom it rose from 0.29 in 1983 to 0.42 in 2004). For middle income families, 78% of their increase in debt between 1983 and 2004 was due to debt secured by their primary residence.
The U.S.A. on FIRE:
The growth in median family income has been slower and more skewed to upper income groups since 1973 than it had been in earlier decades.

When looking at changes over time in the standard of living of the American public, economists often divide the past six decades into two eras. The period from 1947-73 was characterized by robust average annual increases for all income tiers, as well as a modest decline in income inequality. The period since 1973 has been characterized by much slower growth for all groups, and also by an increase in income inequality. In the first era, the average annual growth rate in family income exceeded 2.5% in all income quintiles -- and the growth was slightly higher in the lower quintiles than in the upper quintiles. In the second era, the average annual growth rate was much lower for all quintiles, but it was much higher in the upper quintiles than in the lower quintiles.