# News The Changing American Dream

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1. Sep 8, 2013

### Astronuc

Staff Emeritus
The Great Recession and aftermath have apparently changed perceptions regarding home ownerhip and financial security.

The New American Dream: It's Not What You Think
http://finance.yahoo.com/news/american-dream-not-think-173054394.html

Usually owning a home means going into debt, i.e., paying a mortgage, for some time, unless one has substantial assets.

Do folks see owning a home or living debt-free as eventualities? Is retirement at 65 to 70 feasible?

2. Sep 8, 2013

### lisab

Staff Emeritus
The idea of owning a home appeals to me because I want to solve my own problems. Leaky faucet? Weeds in the yard? I don't want to have to ask someone to fix these things - I want to do it.

And if I want to plant a garden, or build a fence, or install an irrigation system, or get a dog, I don't want to have to ask if I can. That would make me feel like a kid asking my parent for something.

These kinds of things are a bigger deal to me than having a mortgage.

And I think the younger generation will eventually want to be their own bosses, too. Certainly, the recession has made an enormous impression on young people, but eventually they will "heal". They will eventually want to own their own homes, I think.

3. Sep 9, 2013

### Zarqon

I found it a bit surprising that more cared about retiring at 65 than they did about saving for sending a kid to collage (only 8 % ). Maybe it could be explained by the fact that the poll was aimed at young people, and they haven't thought of kids yet.

One positive thing though, I think it's in general good that the young people are becoming more aware of debt problems, because this means that they are going to be more reasonable when it comes to fixing also the US national debt. Lowering the US debts will likely involve normally unpopular things like tax increases, and it will probably be a lot easier to take the necessary decisions here if the people are understanding of the issues.

4. Sep 9, 2013

### ModusPwnd

Only for the richest members of society, but it has always been that way hasn't it?

I'm older than the survey respondents, in my early 30s. The dream of owning a home is certainly gone for me, they are still too expensive and they tie you down to the mercy of the local economy and taxes.

5. Sep 9, 2013

### Office_Shredder

Staff Emeritus
Retiring by 65 is only available to the richest members of society? No, that's not correct

http://www.cnbc.com/id/100744474

The average retirement age has recently risen to 61. In the 90s everyone was retiring in their 50s.

6. Sep 9, 2013

### Astronuc

Staff Emeritus
I was looking at my social security statement recently, and it mentions the change in the law regarding SS benefits. For those born in 1980 and later, retirement age was increased to 67 and they are encouraging people to defer SS benefits until 70 or as late as possible. This would presuppose that one has alternative means, e.g., pension, savings, 401K. And if one has children, then likely one wants to leave an inheritance of some kind.

Over the past 3 decades, I have seen pensions shrink, or disappear, and many companies. I've seen middle-aged professionals basically dumped because they are considered too expensive to support. I now see people who should be retired competing for low paying jobs that would normally be taken by high school or college students, or those with a high school degree.

Of course, I've know folks who 'retired' then continued to work into their 80s.

At the same time, the article has mentioned burgeoning consumer (credit card) and student loan debt. That is very worrisome considering the precarious state of the economy.

7. Sep 9, 2013

### mheslep

The yahoo article is irksome in that it paints the current economic problems as part of some inevitable changes to American economics like they were the movements of a continental plate, which avoids messy finger pointing at policy choices of the current political leadership. Change is inevitable, but I say this particular set of circumstances are not.

8. Sep 9, 2013

### Locrian

Another article that may be relevant to the discussion:

Mind the (Expectations) Gap

9. Sep 9, 2013

### Ryan_m_b

Staff Emeritus
In many European countries life-time renting is the norm, it's not the end of the world not to buy a house.

10. Sep 9, 2013

### johnqwertyful

Yahoo news is terrible. Worse than Fox, I take nothing they say seriously.

Most of what they write is entirely irrelevant and/or sensationalistic.

11. Sep 9, 2013

### johnqwertyful

Also "Great Recession", hardly. Unemployment spiked, but it's not as bad as it was in the 80s (and certainly less than the 30s), and it's coming down. Median income hasn't really changed, although it did dip a (tiny) bit recently.

There was a recession, but it's nowhere near the same league as the Depression of the 20s/30s.

12. Sep 10, 2013

### BobG

The survey cut across age lines and priorities were different for different age groups (debt and financial surveys were important among all age groups, even if not the top priority within each age group, hence the high ranking).

I don't see anything unhealthy in a person considering saving for their own retirement to be at least as high a priority as paying for their kids college education. A person does what they can for their kids, but tilting so far that the parent is living in poverty so the kids can live in luxury is going to a bit of an extreme.

Preparing for your kids future should be like when the oxygen masks drop down from the roof of the plane. Put the mask over your own face first, then over the face of whichever of your kids seems to hold the most promise for the future.

13. Sep 13, 2013

### BobG

Actually, the American Dream for young people could be something completely different than for the baby boomers. Average is Over

14. Sep 13, 2013

### Staff: Mentor

Though he doesn't say it explicitly, he vaguely alludes to the false (but popular!) idea that increasing inequality means increasing poverty.

15. Sep 13, 2013

### Pythagorean

I'm not paying for my kid's college (I have two). My parents didn't pay for mine (but they helped). I did loans for undergrad and am teaching/research for grad. It's the only way to go imo. Kids I knew that had college paid for where not quite as serious in my limited sample space.

16. Sep 13, 2013

### Pythagorean

I was just thinking about what retirement meant for me and owning a home and doing a lot of camping and sailing in the summers was it.

17. Sep 13, 2013

### AlephZero

How much of this "new dream" is just reverting to the mean, after the 2 or 3 decades of distortion from the credit bubble?

Clearly it's not a perfect repetition, since for young people the principle of student loans to fund mass higher education is a new twist. But as Mark Twain said, "history doesn't repeat itself, but it does rhyme".

18. Sep 13, 2013

Staff Emeritus
3 decades of credit bubble? In 1984 the prime rate was 12 or 13%!

What I don't get is the language used - like debt is something that just happens to people. "I was walking down the street, minding my own business, not bothering anyone, and suddenly I was $50,000 in debt!" 19. Sep 14, 2013 ### SteamKing Staff Emeritus Happens more often than you think. Pay for a year of college (or collage for the less fortunate) at a good school,$50,000 if you don't shop wisely.

Need a new car (average price now approx. \$30,000, and about to get much more expensive when the average fuel economy rules say cars must get 50 mpg or whatever fantasy number the politicians pull out of their ...)

Want to put a down payment on a home, but dang, you happen to live on the Left or Right Coast.

But before you get your new salt box, you want to get married, but your intended is a Bridezilla.

...

20. Sep 14, 2013

Staff Emeritus
And are people required, to pick on your second example, to buy a new car? Does someone hold a gun to their head?

I've gone into debt for all of those things you mention, except for the Bridezilla. In all cases it was because I made a decision to do so, not because debt somehow befell me through no action of my own.

21. Sep 14, 2013

### epenguin

In the UK house prices are, and have been for decades, a national obssession, house prices, house improvement, and house prices. It is subject of frequent and regular TV programmes and a standing joke tagline. It's weird (though I could explain it) - a fall in house prices is presented as a national tragedy, and an increase welcomed as economic good news. Though it's not considered good when the price of gas or water etc. increase like most things are doing, and no one complains about the price of phones or computers falling.

In other European countries as far as I know there is not this hysterical obssession - though quietly many of them have become like the UK majority home owning and the prices robustly increasing, but not so out of line with reality as in the UK

Last edited: Sep 14, 2013
22. Sep 14, 2013

### BobG

I don't think the current model is just because of a credit bubble. There have been real technology and productivity advances that created the current conditions. But portions of how we do things could be just a temporary diversion.

Before the 1920's, people were pretty much on their own to save for their retirement, if they so chose and had the capability. And the first retirement "plans" were mainly tax breaks (or at least deferred taxes) for those well off enough to save for their own retirement.

Defined benefit plans (pensions) were the first retirement plans geared towards the average worker. In 1940, those covered 15% of workers; in 1950 - 25%; in 1960 - 41%; in 1970 - 45%; in 1980 - 46%. That was the peak. By 1990, defined benefit plans covered 43%; and fell to 18% by 2011.

Of course, part of that trend is that employee contribution plans have been replacing defined benefit plans. In other words, it's easier for the average worker to plan for their own retirement, just as the higher paid workers have.

But, there is a definite trend towards the average person assuming more responsibility for their own future.

That's also somewhat present by employees funding more of their own health care, perhaps countered by Obamacare being the start of a trend for government to fund more of people's health care? I think the health care part is kind of uncertain, but a return towards the days when people had to find a way to fund their own health care (or at least more of it) is certainly possible.

I think security is something a person is going to have to achieve. It's not something that will happen just because you worked at the same place for 30 or 40 years.

And I think that could be hard for those who, for one reason or another, really won't be in a position to reap the benefits of improvement in the overall economy.

23. Sep 14, 2013

### mheslep

24. Sep 14, 2013

### edward

Getting back to the OP:

bold mine

I question the wisdom of choosing that age group. How many people in that age group have even given thought to buying a home?

Home ownership as the American dream goes well back in history. Until 1850 only Landowners could vote. Seeing homeownership as a status symbol stayed with us ever since then.

Before the financial crisis there were a lot of entities pushing people towards home ownership.

For instance: When my son bought his home it was with a subprime mortgage because he made no down payment. He could easily have afforded a down payment, but the real estate agent urged him to save his money to buy furniture.

In my opinion as far as the American dream goes it collapsed under the weight of greed.

BTW the same investment entities involved in the mortgage crisis are now buying up foreclosures.

http://online.wsj.com/article/SB10000872396390443696604577644700448760254.html

Last edited by a moderator: Sep 25, 2014
25. Oct 21, 2013

### Astronuc

Staff Emeritus
Study: 15 percent of US youth out of school, work
Study: Nearly 6M youth out of school or work, likely locked into limited prospects as adults
http://news.yahoo.com/study-15-percent-us-youth-040402321.html