So the middle classes are knee high in debt because their kids need iPods and fancy cell phones. Right?
My biggest criticism of the Times article is that it furthers the impression that middle class individuals are spending their money on frivolous luxury items and could solve all of their problems with a little belt-tightening. The reality is not that simple. As Professor Warren has shown, over consumption of luxury goods is not the reason why middle class families are up to their eyeballs in debt. The average family of four spends a lot less on clothing (21% less) and food (22% less) now than thirty years ago, Sean John and Godiva included. To the contrary, many families have to pay for these goods on credit because the cash is all going to meet the mortgage payment (69% more), pay for health care (90% more), and ensure that the kids get daycare (100% more now that mom’s out working).