The early 1970s marked a major milestone in the development of our society. During that time, we went off the gold standard. This gravely altered our economic landscape.
The unfortunate result was an explosion of credit and debt, a severe decline in investment as a percentage of GDP, stagnating real median family income, and rising income disparities.
Over the past 40 years, total debt as a percentage of GDP rose four-fold, investment as a percentage of GDP fell by half, annual real median income grew less than 1 percent, and the income share for the top 1 percent increased threefold.
During this time, employment as a percentage of the population rose 5 percentage points, from 58 percent to 63 percent, yet middle income families struggled. Real medium income growth for single earners was negligible, while that for dual earners rose less than 1 percent per annum. Fringe benefits rose, but they were significantly offset by the cost of education, healthcare, childcare, transportation, and all taxes. Economic polarization resulted and the middle class suffered.
These economic pressures placed incredible strains on the family structure – where quality time with children fell precipitously. As a result, many children did not receive the critical skill sets early on, and the education system did not compensate for this deficiency.
Hence, many college graduates today do not to possess the requisite skills demanded by employers. In fact, employment as a percentage of the working age population has declined to levels not seen since the early 1970s.
Our economic vitality requires a return to basics that includes the gold standard, a stronger family structure, and a learning environment that promotes creative and strategic thinking.
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