Diversity and the Debtor Nation

http://www.wvwnews.net/story.php?id=3002

By http://www.wvwnews.net/story.php?id=3951

I’ve long suspected that the spectacular increase in Americans’ level of debt is one of the consequences of our nation’s shifting demographics. We’re spending more and more money, more than we have, to escape diversity. I just came across a 2005 article by law professor Elizabeth Warren and her daughter Amelia Warren Tyagi that seems to vindicate my suspicions. Of course, they don’t say exactly that diversity is bankrupting us, but that appears to be the real message, distorted though it is by the code of political correctness.

Warren and Tyagi cite the usual alarming statistics about Americans’ level of debt. The number of families filing for bankruptcy quintupled between the early 1980s and 2005, and the number of home foreclosures tripled. Things have only gotten worse in the years since: home foreclosures increased by 75 percent from 2006 to 2007 alone.The usual explanation of increasing American debt is that we’re wasting our money on luxury items. Warren and Tyagi show that explanation’s all wrong though: we’re spending the same amount or less on clothes, cars, and appliances as we were in the late 1970s.

It turns out that what is really driving Americans into debt is the cost of living in a decent school district. Home prices have, of course, been soaring: the average mortgage payment on homes has increased by over 69 percent over the past generation. What’s the reason for the increase? According to Warren and Tyagi, the most important factor in the price of a home is the quality of the school district it’s in.

I think we all have an idea of the demographics of good school districts. Warren and Tyagi talk about parents’ fretting over “news stories about kids who can’t read, classrooms without textbooks, and drug dealers and gang violence in school corridors.” Some races are more prone to illiteracy, gang violence, and drug dealing than others.

What seems to be happening then is that, as diversity increases, so does the proportion of lousy schools. My conclusion is that whites are engaging in a bidding war for homes in the ever-shrinking number of majority-white neighborhoods, and massive debt is the inevitable result.

Debt isn’t the only negative consequence of rising home prices. Tyagi points out in an interview that having a child is the best predictor of bankruptcy today. The enormous cost of having a child is sure to lower white fertility. Tyagi also says that home prices are the reason why more and more wives have to get jobs as well. Indeed, the articles I’ve cited are based on Warren and Tyagi’s book The Two-Income Trap: Why Middle-Class Mothers and Fathers are Going Broke.

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2008-04-03