The bankruptcy bill passed on April20,2005 by the Bush administration merely strengthens the idea that the American middle class is made up of greedy, irresponsible people, who prefer to file for bankruptcy in stead of repaying their debts, and who think bankrupts lead a carefree life. The press too adds to this note of gloom saying that people spend more on luxury goods and on bigger and fancier houses and cars that they can ill afford. The critics also say that there is more competition among neighbors to own the best branded goods, while at the same time the altruistic instinct of supporting education or culture has diminished.
Economic data of present times show that families now have more money to spend as more members are earning. The typical two income family of the present where both the husband and wife are earning make75 percent more than what a typical family of the last generation
earned. Although they have more to spend, their savings have drastically fallen. They are the educated class, having decent jobs, but they find it difficult to pay their medical bills. Filing for bankruptcy has increased drastically among this class.
Warren and Tyagi argue that the reason for the financial crisis among the middle class is not their spendthrift habits, but that they have to s ...