[mikepmalai]

So what parts of the "American Dream" are cut and/or subsidized with debt to fit reality? Median household income is about $50K so there's about a $80K shortfall between the $130K "American Dream" and the $50K "Median American". Assuming $20K of the $80K shortfall are taxes you wouldn't have to pay due to earning $50K instead of $130K, you would still need to cut $60K out of expenses. Looking at the list, the line items most likely to see cuts are:

Housing at $17k per year

Groceries at $13k per year

Car at $11k per year

Medical at $9k per year

Education at $4K per year

Apparel at $2.6K per year

Vacation/Entertainment/Discretionary at $17k per year

Savings/College Investments at $22.5k per year

What's scary is you can completely cut savings, discretionary, and medical (~$50k total) and still need to find another $10k to cut. This is how we end up with people in debt and/or are forced to live without a safety net (no insurance/savings) to fund everyday expenses.

So what's the fix? Tough to say. Near term you're definitely seeing a rise in "sharing economy" type activities to better utilize/monetize assets. Provider gets another revenue stream (to supplement flat/stagnant wages). Consumer gets an end product at an affordable price (since they can't afford it otherwise).