by Moe Zilla

Created on: January 20, 2008   Last Updated: May 11, 2009

"Let it be said by our children's children that when we were tested, we refused to let this journey end," Barack Obama told the American people on the day of his inauguration. He hoped our grandchildren would remember "that we did not turn back, nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations."

But is it a time for sorrow or a time for hope? After Obama's inauguration, the question lingers: can America's middle class recover? For a century that dream was simply to own a house and have enough money to raise a family. But that hope has vanished for millions of Americans. It's not just one person's story - it's everyone's.

Greedy lenders have cause some of the damage. Homeowners with sub-prime mortgages are now behind on their payments. And the healthcare system has racked up huge profits while leaving more American families bankrupt. The pressures have taken their toll, and the middle class is shrinking, according to recent studies, as more and more families drop over the line into poverty. And even familes that have escaped these dangers are facing darker prospects than ever before. One economist even noted that the only reason our unemployment figures don't look worse is that several people have simply stopped looking for work altogether - and are thus no longer counted as unemployed...

But is the American dream crumbling? Realizing that dream involves finding a good job - but if that plan requires going to college, there's more trouble. Today the high cost of college tuition is saddling entire generations with crushing debts that will take many more years to pay off. (One author coined the phrase "Generation Debt," noting that college students now graduate with an average of $18,650 in unpaid student loans, only to face a shrinking economy which offers them only low-paying entry level jobs.) Author Tamara Draut lays the blame on a "debt for diploma" philosophy at colleges, which have expanded the curriculum but then jacked up tuitions to cover it. Now simply renting and furnishing an apartment or buying work clothes for a new job can lock these twenty-somethings into credit card debt.

And the high cost and low availability of health insurance are a ticking time bomb. One catastrophic health problem can instantly push many workers out of the middle class and into poverty.

Even holding a job is no guarantee of middle class success. (Draut notes that today men with a Bachelor's degree between the ages of 25 and 34 barely earn $6,000 a year more than men who only had a high school diploma in 1972.) Inevitably, in this environment the middle class is saving very little money, which in effect means that even those who remain in the middle class now have no cushion if bad luck strikes. Unemployment, natural disasters, accidents or health problems can easily wreck the financial position of still more middle class Americans.

The state of the middle class is usually invoked politically while discussing possible solutions. There's arguments about whether the answer is to create more jobs through tax incentives to new and existing businesses, or to offer those tax breaks directly to the middle class. But regardless of which path is best, there's a universal consensus that the middle class is shrinking, and the middle class is in danger.

Recognizing that is the first step towards trying to fix it.

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