Saturday, February 9, 2008

Two Income Trap

Tonight I started reading The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke, which is an interesting book by a Harvard Law Professor and her daughter. The book debunks the myth that Americans are going bankrupt in ever increasing numbers due to over-consumption. Instead the authors propose that the problem is largely a bidding war over houses in neighborhoods with good schools along with ever increasing demand and tuition costs for college.

Here's a great quote from the book:

"The concept of public schools is deeply American. It is perhaps the most tangible symbol of opportunity for social and economic mobility for all children, embodying the notion that merit rather than money determines a child's future. But who are we kidding? As parents increasingly believe that the differences among schools will translate into differences in lifetime chances, they are doing everything they can to buy their way into the best public schools. Schools in middleclass neighborhoods may be labeled "public", but parents have paid for tuition by purchasing a $175,000 home within a carefully selected school district."

They propose a well-designed voucher program as one way to decouple the relationship between where one lives and where the kids go to school as a way to "eliminate the need for parents to pay an inflated price for a home just because it happens to lie within the boundaries of a desirable school district."