Divulging into the Predicament of the American Dream

The pinnacle days of the American economy are steeped in the annals of history, and the prospects for a resurgence of robust economic health for the United States in the near future appear bleak.

The 20th-century construct of the “American Dream”—where the majority aspired to or achieved middle-class status, affluence, and even exorbitant wealth—has largely evaporated by the mid-21st century. According to Moody’s Analytics, the wealthiest strand of the population, comprising 10 percent with incomes starting at $250,000 annually, was responsible for half of the total consumer spending ($10 trillion) from September 2023 to September 2024. This widening financial gap has marked the demise of an economic model that, since the conclusion of World War II, had been fueled by the spending patterns of the average working American.

This demographic of wealthy consumers has so overpowered the economic landscape that it suggests the end of a post-war era when middle-class expenditure dictated the nation’s economic vitality. For millions of Americans, such shifts were not unanticipated, the erosion of the American Dream and the underlying consumer capitalism having begun over fifty years before.

Incremental austerity measures directed at social welfare and educational programs, coupled with tax reductions for the affluent and corporations, have strangled social mobility, particularly for those in poverty. The shift from manufacturing to the service sector, automatization, and the export of jobs contributed to the diminishing middle class, leaving them in a state of struggle rather than ambition. Many powerful Americans have seemingly desired this outcome for decades.

Economic power of regular Americans peaked between 1970 and 1974. The OPEC oil crisis of 1973, along with the deindustrialization of the American Midwest, led to an era of stagnation and inflation that ruptured three decades of unceasing US economic supremacy.

The neoconservative backlash against President Lyndon B. Johnson’s War on Poverty programs, considered a communist-inspired folly, spearheaded a gradual dismantling of welfare initiatives. President Ronald Reagan’s administration further undid the social fabric of the New Deal, alleging its planners harbored sympathedies for fascism.

By the 1980s, through lobbying and ideological shifts, a lower-tax system for the wealthy and corporations took form, with top marginal tax rates plummeting from 91 percent in the 1950s to as low as 28 percent in the ’80s.

The 2020 RAND Corporation estimated that from 1975 to 2018, tax cuts and welfare austerity enabled a $50 trillion wealth transfer from the bottom 90 percent to the wealthiest 10 percent. The federal minimum wage has remained frozen at $7.25 since 2009, with nearly a quarter of workers earning less than $25,000.

In essence, the US has regressed to a pre-Great Depression economy where the consumerism of the wealthiest has disproportionate influence. The attainability of the American Dream, already illusionary, fades further as the roadmaps to middle-class attainment crumble under negligent policy-making. It’s a remnants of a shattered dream, dismantled by bipartisan efforts.

Source: https://www.aljazeera.com/opinions/2025/3/27/the-american-dream-is-officially-over?traffic_source=rss