Are We Better Off Than Our Parents?
I found it amusingly interesting to read front page newspaper articles claiming how better off we are compared to a generation ago and then read another front page newspaper article a few days later stating how our federal government is in debt or how much us, as Americans, are in debt!
Granted, we have considerably more material wealth in the amount of things, luxuries, tech gadgets and fancier automobiles and homes than generations before us. But the source of all that material wealth not because we are better off financially but because of among other things, innovation, technological advances, cheap products from Asia, and debt accumulation.
According to the Consumer Price Index from the Bureau of Labor Statistics, our average income may have double since 1967, but the price of goods has risen over 500%! I repeat, our income as doubled, but the prices of the stuff we buy as risen over 500%. And we make up that disparity by accumulating more debt as individuals, as a society, and as a country, so much in fact that household debt as a percentage of disposable personal income is over 100%. While it may seem good at times when the Federal Reserve lowers the Fed prime rate or prints of more dollars to circulate, what they are creating is price inflation, e.g. the price of goods has risen over 500% since 1967. So it may seem we are better off than our parents because we have more stuff, in reality we are not better of.
We are able to have larger homes, advanced TVs, and more toys not because we generate more income, but because we spend more and are accumulating increasingly more debt in our families and in our government. We may have more stuff then previous generation, but we also have more debt, less wealth, and we most certainly not better off. We don’t have just more debt from the accumulation of more stuff, but more time-wasters, more stress, more distractions, more greed and envy and more aggravation!
If I do consider myself better off than my parents, I want it to be based on my own hard work, success and financial wealth, and not because the federal government continues to accumulate astronomical amounts of debt to pay for so-called social programs and other things they claim will make our lives better, or because I have to accumulate more debt to keep up with the price inflation the federal government is creating us by printing more money.
Justin P. Ertelt is the author of Saving Your Way to Success, and owner of http://www.savingyourwaytosuccess.com, helping others learn the importance of saving money and financial planning, and helping others achieve financial success. To learn more visit http://www.savingyourwaytosuccess.com
Tags: accumulation, dollars, income, inflation, saving money