Autopsy of the American Dream

At some point in the near future, social scientists will try to understand how our nation has devolved from the post-war economic investment in a thriving middle class to a distinctly feudal society characterized by extreme wealth and extreme poverty — relics of our once-greatness exhumed to perform a post-mortem examination of how we got here in 50 short years. An autopsy of the American Dream will reveal not a single fatal wound, but death by a thousand cuts — policy choices, market trends, and shifting priorities that have favored capital over community, the wealthy over the many, and short-term gain over long-term security. 

There was a time when the American Dream held a beacon of promise to both native-born Americans and to immigrants seeking shelter and refuge from the horrors of global wars and poverty. For much of the 20th century, this dream was not just an aspiration but a tangible reality for millions of Americans. However, today this utopian vision of American possibility through hard work has virtually disappeared from the economic landscape. This is the autopsy of the American Dream, a careful dissection of the forces that have hollowed out America’s middle class—one policy, one market trend and one lost opportunity at a time. The golden era of the middle class began after World War II, fueled by strong unions, rising wages, affordable homeownership and robust government investment in education and infrastructure. The GI Bill opened college doors, the FHA and VA loans made homeownership accessible, and pensions promised security after years of company loyalty. 

Yet, foundations are only as strong as the society’s commitment to maintaining them. Over the past half-century, a cascade of decisions and shocks have chipped away at these pillars. There is a distinct irony in that many of today’s political leaders — the very individuals who benefited from postwar investments in affordable housing, publicly funded education, and expanding social safety nets — now champion policies that undermine the very structures that helped build their own prosperity. 

Homeownership

The American Dream has always revolved around homeownership. Yet over the past 50 years, homeownership has grown increasingly out of reach for the middle class in America and entirely out of reach in many high-cost regions absent familial support and equity transfer. Looking at the relationship between wages and housing costs, wages for most American workers have been stagnant since the 1970s, while home prices have far outpaced inflation. Whereas housing was traditionally viewed as shelter, housing became a lucrative asset class for Wall Street, pricing first-time buyers out of the market and into much longer, if not permanent rentership. In essence, homeownership, once the cornerstone of middle-class wealth-building, has become a barrier to intergenerational mobility and financial stagnation across the nation.

Education

For millions, the promise of education as a ladder to the middle class has been replaced by the reality of debt servitude. The contradiction is vivid: some leaders who themselves graduated from low-cost public universities or received generous grants and GI Bill support now argue against expanding access to affordable education for today’s youth. Since the 1980s, public and private university tuition has soared, far outstripping inflation and wage growth. Specifically, what once could be covered with a summer job now often requires tens of thousands in loans that are uniquely stripped of the constitutional right of bankruptcy ensuring that student loan debt will accrue over decades for those whose parents were unable to pay for their higher education. Americans now owe over $1.7 trillion in student loans, an amount of consumer debt behind only mortgages and far outpacing auto loans. Consequently, young adults delay homebuying, marriage, and starting families under the crushing weight of student loan payments. 

Perhaps nowhere is this shift clearer than in California’s University of California (UC) system. For decades, public universities in California — including the prestigious UC campuses — were tuition-free, opening the doors of higher education to generations of working- and middle-class students. This model was rooted in the belief that accessible education fueled economic growth and social mobility. Yet, over time, the landscape changed dramatically. What was once an engine of opportunity is now, for many, a barrier that stunts the prospects of a vibrant, upwardly mobile middle class.

The Collapse of the Pension-Funded Retirement

A secure retirement was once the reward for a lifetime of labor. Union-negotiated pensions offered workers predictable, stable incomes in their golden years. But the landscape has changed dramatically. Over recent decades, the shift from employer-funded pensions to 401(k) plans has transferred risk from companies to workers. Not every worker has access to a 401(k), and many cannot afford to contribute enough. Retirements now hinge on the performance of the stock market, leaving millions exposed to downturns at the worst possible moment of ageism and economic vulnerability. Further, with political gridlock and demographic pressures, even Social Security’s future feels uncertain for many seniors leaving them in peril wondering if they’ll ever be able to retire without having to sell their primary homes and liquidate their assets.

Healthcare

Nowhere is the American Dream’s unraveling more apparent than in healthcare, where costs and coverage have become a constant worry. Medical expenses have soared faster than incomes, making even those with insurance vulnerable to bankruptcy from illness or injury. Furthermore, the link between jobs and health insurance has weakened, with employers shifting more costs to workers or dropping coverage altogether. Despite the Affordable Care Act, tens of millions remain uninsured or are forced into high-deductible plans where healthcare is unaffordable when they need it most. Health insecurity has become a uniquely American anxiety, undermining both productivity and peace of mind — a rather lamentable, yet totally avoidable situation for a so-called first world nation.

Citizens United

The 2010 Supreme Court decision in Citizens United v. Federal Election Commission reshaped the American political landscape. By ruling that corporations and unions could spend unlimited amounts on political campaigns, the Court unleashed a torrent of money into politics. The result of this decision was a direct line to wealthy individuals and corporations gaining outsized influence in shaping policies, often at the expense of middle- and working-class interests. Moreover, big-money donors push agendas that block reforms on healthcare, education, housing and labor, stymieing efforts to address the very crises hollowing out the middle class. 

Stock Buybacks

Once considered a form of market manipulation, stock buybacks have been revived as a standard corporate practice since the 1980s. Companies use profits not to raise wages or invest in workers, but to buy back their own shares boosting stock prices and rewarding executives. The benefits of buybacks flow disproportionately to wealthy shareholders and corporate insiders, widening the gulf between the affluent and everyone else. In addition, money spent on buybacks is money not spent on innovation, job creation, or worker training which undercuts long-term economic health and mobility.

Autopsy Results

This autopsy of the American Dream might reveal the causes of its death as we understand it historically. However, in understanding the failed policies that led to its slow demise over time, we find the antidote to revivify its promises. Resurrecting the middle class represents the nation’s foremost challenge, and accomplishing this objective requires a concerted commitment and decisive action. For example, increasing allocations to initiatives such as the Low-Income Housing Tax Credit can improve housing affordability for working families. Expanding state and federal investment into higher education and improvements to public service loan forgiveness programs, alongside the restoration of bankruptcy protections for student loan debt, would further support graduates facing financial hardship and enhance overall educational accessibility. 

Retirement security may be bolstered by reinforcing Social Security benefits and encouraging employers to establish robust pension schemes. Universal healthcare can be advanced through measures such as broadening Medicaid eligibility or introducing public health insurance options for those without employer-sponsored coverage. Campaign finance reform might entail enforcing rigorous standards of transparency in political contributions and setting equitable limits on campaign expenditures, as evidenced by certain state-level legislation. Finally, facilitating homeownership could involve implementing first-time homebuyer assistance initiatives for teachers and other community heroes whose traditional middle-class status has been eroded over time and foreclosure prevention strategies to support families during periods of economic instability. Collectively, these focused interventions, underpinned by the dedication of policymakers and citizens, lay the foundation for the rejuvenation of the American middle class.

Lisa Ansell is the Associate Director of the USC Casden Institute and Lecturer of Hebrew Language at Hebrew Union College-Jewish Institute of Religion Los Angeles.