House Rich, Cash Poor

      I remember asking my mom what she meant by the statement "house rich, cash poor". She explained that many people in California had all of their wealth tied up in the value of their homes--but when it came to paying the bills, they didn't have the cash to do so.

      There is a going trend amongst homeowners to up-size their homes, while sacrificing other expenditures like education and health in order to afford bigger living spaces. According to the LA Times, "the typical American home has grown about 40% larger over the last 30 years." The ironic part about this statistic is that the number of children per household has declined over the past 30 years. Therefore, the change in home size cannot be explained by an increase in children; rather, it appears people are associating socio-economic status with home size. The problem with this trend is that families are devoting "34% of household expenditures to their homes". These expenditures do not benefit society like an investment in education would, which has caused the U.S. to be behind in "both the quality and quantity of the labor force [because they] are not keeping pace with the demands of the skill-based economy". If we want to grow as a country, we need to learn from our Chinese neighbors and devote more of our household expenditures to education.