Why Is the Middle Class Important to the American Ideal?

            I found an interesting perspective piece in the Deseret News. The article was an excerpt from a forthcoming book by Victor Davis Hanson, The Dying Citizen: How Progressive Elites, Tribalism, and Globalization Are Destroying the Idea of America. The title of the article is “Perspective: The looming peasant state.” It begins as follows: 

The ideal of an independent middle class, originally agrarian, rather than a subservient peasantry was the American ideal, at least until recently. All politicians still praise the middle class, but few have sought or found ways to preserve it in a radically changing globalized world.

The result is the emergence of a new American peasantry, of millions of Americans who own little or no property. The new majority has scant, if any, savings. Fifty-eight percent of Americans have less than $1,000 in the bank. A missed paycheck renders them destitute, completely unable to service sizable debt. Most of what they buy, from cars to electronic appurtenances, they charge on credit cards. The credit card indebtedness is over $8,000 per household and over $2,000 per individual — paid through monthly installments at average annual interest rates of between 15% and 19%, at a time when most home mortgages are usually below 4%.

Such short-term debt is often roughly commensurate with the payments and share- cropping arrangements that premodern peasants once entered into with lords and made it impossible for the serf to exercise political independence or hope for upward mobility. The chief contemporary difference, of course, is that the modern American peasant is the beneficiary of a sophisticated technological society that allows him instant communications, advanced health care, televised and computer-driven entertainment, inexpensive food and a social welfare state. These material blessings often mask an otherwise shrinking middle class without confidence that it is in control of its own destiny.

A fifth of America receives direct government public assistance. Well over half the country depends on some sort of state subsidy or government transfer money, explaining why about 60% of Americans collect more payments from the government than they pay out in federal income taxes, in health care entitlements, tax credits and exemptions, federally backed student and commercial loans, housing supplements, food subsidies, disability and unemployment assistance, and legal help.

            Hanson explained that the American middle class decreasing, and a “subservient peasantry” is growing. The representatives that we elect to run the business of America are not doing anything to strengthen the middle class. He gave the following numbers.

·         Millions of Americans “little or no property.”

·         This new majority has few savings. “Fifty-eight percent of Americans have less than $1,000 in the bank.”

·         “A missed paycheck renders them destitute….”

·         Most of their big purchases are charged on credit cards: $8,000 per household and $2,000+ per individual with interest rates between 15% and 19%.

·         Most mortgages on homes are less than 4%.

In addition, 20 percent of Americans receive public assistance from the government. More than 50 percent of Americans depend on payments from state or federal governments – a big reason “60% of Americans collect more payments from the government than they pay out….”

      The American “peasants” no longer starve to death at young ages from malnourishment

because the government doles out payments to them. However, about 46% of Americans “die with a net worth of less than $10,000.” Hanson gave more information on the diminishing middle class.

Even those of the middle class who can be thrifty, who save some of their income and develop modest passbook savings accounts, are now targeted by institutionalized cheap interest. The result of massive and chronic trillion-dollar annual budget deficits — the national debt is now near $30 trillion — and the zero interest rates of the often jittery Federal Reserve is the destruction of any interest income on savings accounts.

The modest, middle-class citizen saver thus faces daunting options just to preserve the value of his money. He can engage in risky real estate speculation or invest in a booming stock market, fueled not by business performance, per se, but often by those who have nowhere else to park their money. So middle-class families, to be safe, often keep their modest savings in passbook accounts or buy federal bonds, where interest payouts below 1% do not cover the erosion in value of their principal due to annual inflation.

            According to Hanson, American citizens have already differed from those in other Western countries in the past three centuries. Americans have “expanded rights, responsibilities and privileges for the vast majority of the resident population.” This condition could have been born because of the “almost limitless supply of land” and the lack of European “traditions of class distinctions, primogeniture, peasantry and serfdom.”

The Founders built on parliamentary traditions from Great Britain and created the U.S. Constitution that protects Americans. This is the reason America quickly became the “freest and most egalitarian society in the history of civilization. Hanson reminded his readers that neither the Founders nor America at birth were perfect.

The point is not that late-18th century America was perfect at birth or could even approach what we now enshrine as 21st century moral values. Rather, the new United States was unlike, or rather superior to, most contemporary nations. Indeed, almost alone of governments, America had hit upon a mechanism that would allow constant self-criticism, legal amendments to its founding documents and moral improvement. Such change came without the necessity of collective suicide or permanent revolution — and yet within the boundaries of constitutional absolutes that transcended time and space, and all made possible only by an empowered and autonomous middle class.

            America became great because it had a large middle class between the few wealthy people and the limited poor class. Now the middle class is decreasing. Many of its members have moved into the wealthy class, while a growing majority are becoming dependent upon the government and losing their ability to take care of themselves. Remember the quote from above that 58 percent of Americans have less than $1,000 in savings. This means that there is little to help them when a rainy day comes. No one can become wealthy while living on handouts from the government.