Originally Posted by kane

Not good, but in a way the middle class did a lot of this to themselves. In the 1950's the average person made around $5,000 per year and the average home cost about $7,000. The average guy could get the average job, get married have a kid or two and he made enough money that he could buy his house, a car or two, his wife could stay home with the kids and they could still afford a little vacation every summer while putting money away for the kids to go to college and him to retire on.

Now the average wage is $36,000, but the average home is $186,000. For the first time in history the average wage earner cannot afford the average home. Part of this is because developers and banks realized if they increased the lengths of mortgages (from 15 years to 30 years) people would buy bigger, more expensive homes because the monthly payments would be about the same. All of this caused a lot of real estate prices to skyrocket. Then other companies got in on the game. TV makers used to make the average TV and they had a few high end TVs for those with more money. They started offering credit so that the average guy could now buy the high end TV. This, of course, caused all prices to go up. Over time the middle class has used credit for so many things that those who make it now just advertise it at the monthly payment price not the full cost which makes it next to impossible for someone who makes the average salary to live like they would have back in the 1950's.

Everyone raised their prices and offered credit and the middle class just kept buying away and filling their McMansios and now the middle class, overextended and suffering from high unemployment are buckling under the weight of this debt.