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The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke
 | The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke Elizabeth Warren & Amelia Warren Tyagi Date: 02 September, 2003 — $16.38 — Book Rating: |
I wasn't going to review this book, but I changed my mind. The advice they offer is almost useless, but the authors point out some eye-opening statistics on how the two-income revolution has negatively impacted the American family.
The salient point is that, while the average two-income family makes far more than a single income family in the 70s, after paying the mortgage, car payments, taxes, day-care, and insurance, they have less discretionary income to save, or buy clothes, food, and gas.
Some would say this is because Americans spend way too much on luxuries, but the authors puncture the Over-Consumption Myth by pointing out Americans spend (in inflation adjusted dollars) 21% less on clothes, 22% less on food, 44% less on major appliances, and far less on other "luxuries" than a generation ago. Instead, the biggest expenditure - by far - is the family home, followed by the need for two cars, day-care, and other necessities for a household where both parents work.
So they totally had my attention, until the authors began proposing ideas for legislation to help the middle-class. Sure, they're good ideas, but if you browse the Brookings Institute, or the Center for American Progress, or the liberal blogs, you find a bazillion other plans that are just as good. Unfortunately for us, the ruling Republican Party just isn't interested in middle class relief.
And after the useless ideas, the authors offer some sage advice you can act on right now: Don't buy a house you can't afford. Duh. Thanks for the tip.
Anyhow, the book is worth a read for the way it presents the financial problems American families face today - but they could have done that in a magazine article and let me bank the difference.
I've noticed that there is a large desire in most people these days to buy
nice homes or condos their first time out. They look at the nice places
all their friends have, and they want it too. The problem is, their
friends can't afford it either, and for some reason most of the people I
talk to seem to forget things like having to pay for ALL their utilities
and having to pay property taxes and home insurance. One person I know
almost bought a $300k condo that was just mediocre because he was afraid it
would disappear, and when I pointed out to him all the extra expenses he
would have, not to mention an association fee on the condo, he realized
there was no way he could afford that. I just don't think people see it
that way, however I do think that it will be the inability for households
to sustain that style of living that will eventually burst the housing
market.
Yeah, I've seen that happen. But, the authors of the book present evidence
that the desire to live in a better school district (the book is focused on
families), led to a bidding war on houses which drove prices sky high.
That's certainly the case in my neighborhood.
Dear Pundit. I just read your blog about India and I must say you are off
the mark. The air is far cleaner than any other country in your area
including that little city state you call home. I have proof which I will
bring you next January. In the meantime, keep up the good work. Hi to Karen
and Casey Jones, AKA Wiley. George B.
Ha! Thanks John (AKA George B.) I'm looking forward to it. :)