The number one reason that people in the United States are not becoming richer all the time has little to do with inflation, or with some master plan of the rich to oppress the poor, but with the ready and easy ability of consumer credit.

When one considers the real cost of the goods people purchase to live, a consumers spending power has increased dramatically, thanks in part to inflation, but also to modernization, and industrialization. "How can this be so?" you cry. "Prices were much cheaper in the past." you say. But this ignores a very important point. Let's take data from, which discusses the cost of living, and living conditions in 1900 Chicago.

According to historical records, the average working man brought home $620.19 a year. In order to earn this, Joe Working Man had to work 60 hours a week. That's 3,120 hours a year spent at work. That means that he earned about $0.20 an hour. Depending on the danger of the work, and amount of labor involved, he might earn more, so, let's give him an hourly wage of $0.25/hr.

In 1900's Chicago, a 1 lb. loaf of bread would cost you $0.05 cents. So it cost Joe Working Man 20 minutes to earn that loaf of bread. Now, a quick check at my local Bi-Lo shows that a loaf of bread can be had for $1.19 a loaf (and is actually on sale for Buy One, Get One Free, but that's neither here nor there). The current (2003) minimum wage is $5.15/hour, but since we let 1900's Joe Working Man have a pay raise, we'll figure 2003 Joe Working Man's had one too, to say $6.00/hour. Not a stellar wage, and I certainly wouldn't want to go back on that wage, but you figure, he's only got to work 12 minutes for that bread. Not an amazing increase, and yes I'm figuring in pre-tax dollars, but stay with me. I could have used the Census figures which state that in 2001, the average income was around $20/hour! That makes that loaf of bread cost a whopping 4 minutes to earn.

So where is all the money going? What's happening? People have turned their increased spending power not to investing and growing wealth, but to purchashing beyond their own means through consumer credit. Want that new TV? Finance it! Lease that fancy Lexus. Get a loan for that new Dell Computer, and so on. Banks are only too willing to lend the money, as long as people request it, and seem able to pay it back. It's not the bank's fault. People make their own choices, and if a person's choice is not to elevate their station in life, but to purchase goods on credit, that's their choice. I've made that choice in my past, and now I'm trying to correct it.

Let's look at the figures: According to the Census, and figures available in a good concise form here ( show that since 1960, the debt to income ratio per household has increased to almost 0.95, with the average household debt standing at a staggering $61,500. If the working people of this country have anyone to point the finger at for their inability to be rich, it is themselves, and their spending decisions. And yes, I include myself in that.