This is a tough subject for me to address. It is tough because I may sound contradictory if I am not precise with my language.
The middle class in the United States (not to speak of other first world countries) is struggling. I understand that we have luxuries today that could have only been dreamed of a generation ago. Still, a lot of middle class families are struggling with stress and money. They work long hours and barely have enough to pay the bills each month, let alone actually save money for retirement or a rainy day.
When this issue comes up, I often hear conservatives talk about frugality and self-responsibility. Even many libertarians go straight to this, and I often cringe.
I am all about frugality to a point, and being a libertarian, I am obviously in favor of self-responsibility. But by addressing these issues first, I think it is letting the government off the hook to a certain degree.
The federal government spends nearly $4 trillion per year, with state and local governments spending at least another $2.5 trillion. About 40% of our income goes to the government, and this isn’t even taking into account how much poorer we are because of regulations.
When you add up federal, state, and local government spending, it is about the equivalent of the median family income in the United States. Figure that one out.
But I will read an article or listen to a talk show and hear about someone who makes a middle class income who is struggling with his finances. Then I hear the horrible response that he could live in a small apartment and cut coupons and budget just a couple of hundred dollars or less per month for food. I also hear that he doesn’t need a cell phone or cable television.
This is all like nails on a chalkboard to me, and let me tell you why.
The problem is that I am hearing this when the topic is mainly about politics or economics. It is not coming from articles or talk shows that primarily deal with financial advice. If I hear this from Dave Ramsey or Suze Orman, that’s fine. It is probably good advice. It is relevant advice.
The problem here is that the complaint is more general about how tough times are today. The complaints are valid. The middle class really is getting hosed, for lack of a better word.
Everybody knows they can live in a cheaper place and eat rice and beans for dinner every night. They know they can get rid of all of their electronic gadgets and save some money. But the point is that these people don’t want to do it, and I don’t blame them.
We are not talking about people with new $40,000 cars who take $10,000 vacations every year. If they are complaining about their lack of money, then maybe I can understand this response. But I am talking about people who are living a fairly modest lifestyle. Maybe they have a new car and have their kids in some activities. But are they supposed to drive a beat-up junker their whole lives and keep their kids fenced in at home?
There is a time and place for lecturing people on how to budget more wisely. When you are talking politics and economics, that is not the time.
Conservatives and libertarians are missing a huge opportunity. Maybe the conservatives don’t care because many of them really do love big government.
But for libertarians, we should be advocates for these people. It is the state that is making their lives so difficult. We should be able to have cell phones and cable television on a middle class income without feeling a major struggle. We should expect an increasing standard of living where we have new luxuries that are affordable.
The problem is that our living standards are not increasing as they should because the state is holding us back. The state in all its forms is hurting savings and productivity. Libertarians should be defending the middle class, telling them that they would be able to have all of their gadgets and more without feeling the struggle if only the state would get off of our backs.
Sure, there are a lot of people who make unwise financial decisions, if we can even judge. But there are also a lot of people who make good decisions. And the middle class, even for those who have been relatively frugal, is struggling because the government is taxing and regulating us like crazy.
So let’s answer the initial question. Is it your fault you don’t have enough money?
There is no clear-cut answer to that. For some people, it really is largely their own fault. For some people, it is primarily the state that has made them poor. For most people, it is probably a mix.
I am not saying all of this as an excuse. You shouldn’t just throw your hands up in the air and say, “the government is too big and there is nothing I can do about being poor.” You still have to take control over your own life to the degree that you can.
The reason that Donald Trump and Bernie Sanders have done so well up until now in the presidential race is because they are acknowledging there is a major problem out there. Most of their solutions may be bad, but at least they are recognizing the struggles out there.
Libertarians should be advocates for the struggling middle class, and the lower class too. This isn’t to make excuses for anyone. This isn’t to say that people shouldn’t take responsibility for their own lives.
If someone is looking for financial advice, you can give it to them, which might include budgeting techniques. But if someone is looking for some sympathy because the government has made it tough to get by, you should provide some sympathy. It is the perfect opportunity to let people know exactly why they are struggling so much.