I believe that in this country we're on the verge of a major suburban collapse of the upper middle class (the so-called affluent class with the incomes of $140,000-200,000) into what can best be described as genteel poverty.
My evidence, strangely enough, starts with a broken microwave.
To get there, start with the housing boom of the 1990s in which middle class and upper middle class people either got suckered or suckered themselves (choose your own interpretation) into buying huge, steroidal houses with 2,400+ square feet, along with multiple vehicles (at least one of which was an SUV). Most of those families purchased those houses at the extreme end of what they could afford, based on that wonderful assumption that property values would keep going up--I don't know--forever.
In the 1990s with low interest rates, relatively cheap oil, cheap food, and little inflation, there was generally enough slack in the budget to make the mortgage and car payments, and even take the family 2-week vacation. If things got tight (overspend on the credit cards at Christmas, did we?), there was always that seemingly inexhaustible home equity line that kept going up as the value of the house did.
What happens, however, when energy prices skyrocket (electricity, fuel oil, gasoline), food prices follow ($4/gallon milk, $3/loaf bread), and the home equity line maxs out?
If the housing bubble bursts, you can't unload the house; you can barely make the payments. Debt as a part of total income rises into the 30-40% level, but here's the damnable part: everybody thinks, in their isolation, that they're the only family on the ropes, and that there is intense shame in their inability to meet their obligations.
So what happens? People do everything to maintain the facade that everything is OK (continuing the normal grousing about gas prices, etc.) while inside those overly large houses the decay is setting in. Here are specific examples I could document from northern Delaware over the past three months:
--A broken over-the-range microwave that is left unreplaced for several months because the $400-500 necessary to get a new one installed cannot be scraped out of the household budget and the credit cards are all maxed out....
--A minor fender-bender. One driver offers to pay in cash so as not to get the accident on his insurance. The owner of the slightly dented Nissan Maxima takes the check, and instead of using it to fix the car, has to put it directly toward outstanding bills.
--A 15% reduction in the number of kids signed up for the YMCA winter soccer and basketball leagues, because at $50-75 per child per sport, many upper middle-class families can no longer afford to write the check for $250-400 to put all their kids into their favorite sports at once.
--Home improvement contractors willing to do almost anything to shave prices and entice business, because people have stopped ordering new floors, new windows, or new sinks for the kitchen.
--Upper middle class people glancing nervously at caller ID before they pick up the phone, because they've never had the experience of trying to duck collection calls before.
--A surprising number of fuel oil delivery customers in our best neighborhoods placed on the payment in advance only lists by the delivery companies, because they've fallen at least 2-3 months behind in their payments.
--People who have no earthly idea what an oil filter looks like, out in their driveways with buckets, grimly determined to change their own oil.
--Payday loan operations reporting an entirely new clientele opening up: suburban housewives from families with six-figure incomes.
There are a lot of sermons to be given on personal responsibility, or the failure of the regulators, or the bankruptcy of American foreign policy, or even the need for universal health care. But there is also an underlying current of fear that I have never before witnessed among the upper reaches of America's middle class.
The new genteel poor sense that something has gone horribly wrong, but they don't know what it is. They're not Baby Boomers--at least not most of them--and they have just begun to intuit that they may well be the first generation in generations to pass down to their children a lower economic status than they enjoyed growing up.
What's scary about all this is that such are the most fertile roots for fascism, authoritarianism, and the aching need for some knight on horseback to save society regardless of what the Constitution or political restraint might raise in objection. People living in growing fear and an increasing sense of personal helplessness are always prime targets to exchange a large portion of their birthright of liberty for better security.
In the long term, that always turns out to be an even greater disaster than paying the piper.