https://www.youtube.com/watch?v=f4ZTwPsmpnc
Robert B. Reich
Aftershock: The Next Economy and America′s Future
Stagnated since the 1970s.
3 coping mechanisms:
1). women went to work
2). both worked more hours
3). go in debt (house prices continued to rise).
By 2007, top 1% had 23.5% of GDP
Late 70s, they got 9% of GDP
The vast middle class lacks the purchasing power to keep the economy going.
The middle class went through the 3 coping mechanisms, it cannot sustain the economy.
The only other time 23.5% of GDP, it was 1928.
https://www.youtube.com/watch?v=akVL7QY0S8A
The Coming Collapse of the Middle Class with Elizabeth Warren
Elizabeth Warren has the same conclusion based on general statistics.
Family earnings went up but male median income stagnated. It means that earnings went up only because two people worked.
But since two people worked, family incomes were going up, but savings rates were going down. What was rising at this time was the revolving debt which reached practically zero in 2006, "negative savings."
Revolving debt 1972-2005
1972: 11% savings. 1.4% debt
2005: -0.8% savings. 15.6% debt.
So, they spent all of their parents savings. Their income and they got in debt.
Where did they spend it on?
76% more on housing/mortgages
72% more on health insurance
cars
child care
tax
Single income family in early 1970s $32,000. inflation adjusted.
Dual-income family in early 2000s. $73,000
1970s spent at half its income on 5 categories
2000s spent 3/4 its income on 5 categories
Fewer total dollars for 2000s family than their parents.
More risk for the 2000s family.
1. Income: two incomes to keep its health insurance, house and cars. If one loses, they can't pay their bills. In the 1970s, they have another worker. 2000s family doesn't.
