One of the things that made America great was that members of each successive generation could hope that they would be better off than their parents. With a growing economy and increasing technological innovation, successive generations accumulated wealth and capital to continue improving their standard of living. Even the poorest among us have access to technologies such as indoor plumbing, air conditioning, and smartphones, that a century ago were outside the reach of even the richest Americans. But despite that overall rise in the standard of living, young Americans today will become perhaps the first generation in memory to expect to be worse off than their parents.
The root of all of that, of course, is in loose monetary policy. The effect of that loose monetary policy has been to raise prices throughout the economy. And because not all prices rise equally, some of the biggest price increases have been seen in education, healthcare, and housing, saddling young Americans with debt that their parents and grandparents never had to deal with.
Consider the cost of housing in most large metropolitan areas. 30 or 40 years ago, a mid-level white collar employee could afford to buy a house on just a single salary, allowing his wife to stay home and raise the children. Many of those houses are now valued at four times what they would have been worth had housing prices kept pace with official government inflation figures. The only way a similar mid-level employee could afford such a house is if his wife also worked and made just as much money. Barring that, you have to be a lawyer, financier, or government contractor to be able to buy houses in the nearer suburbs to many major cities nowadays.
Housing costs are also driven higher because so many starter houses are being snapped up by developers who tear them down to build bigger, more expensive homes. With a shortage of affordable houses on the market, it’s no surprise that more and more young Americans are moving back in with their parents because they can’t afford to buy a house, nor to rent the increasingly expensive houses and apartments that have been snapped up by commercial landlords.
Education costs have increased drastically too, buoyed by the increased reliance on government-backed student loans. The more people who take out loans to go to college, the more demand there is for college admissions slots, and the more money colleges can charge for tuition. Since 1980, the real inflation-adjusted cost of going to college has nearly tripled.
Combine those increased costs with stagnant wages and you have a recipe for a lost generation, one which won’t be as well off as previous generations and which will therefore have less wealth to pass on to subsequent generations. That’s not exactly a recipe for making America great again.