Is The American Dream Gone?
Lately the media has been full of stories about how inflation has made purchasing a home here in America an almost impossibility. And while homes are the largest single expense most American families will make, the second largest expense for most is the purchase of a new car or truck. But here again inflation is making the idea of owning a new car or truck no longer part of the American dream.
Because of the Covid lockdowns and the two multi trillion dollar programs, the stimulus and Infrastructure bills, passed by Democrats at the beginning of President Biden’s time in office, the out of control inflation has been slowing destroying the American people’s chance at living the American Dream. A big part of the American dream has always been that people could own a home and a car. As the Biden created inflation is still tearing through the finances of most Americans, many are now realizing they now longer have access to that American dream.
For anyone who hasn’t had to shop for a new car or truck, there will be a rude awaking when looking at the sticker prices of new cars and trucks. For almost 3 decades now, Americans have had a love affair with pickup trucks and SUV’s. In fact, pickup trucks have become the largest selling category in the American market. But that is about to change.
Over the last 4 years the sticker prices on almost every pickup truck and SUV have risen by, in some cases, almost double. The Jeep brand has long been viewed as a vehicle that appealed to the average American. It’s utility and durability made it a very appealing purchase when an average consumer was shopping for a new vehicle. But over the last 4 years, the sticker prices on a Jeep SUV have doubled. Four years ago, a shopper might see a sticker price of around $38,000 for a nicely equipped Jeep Grand Cherokee. Today, that same Jeep Grand Cherokee might have a sticker price of $76,000 or more. And when that $76,000 sticker price is coupled with a 9% interest rate, most buyers are in a position of not being able to make the payments. In fact, there are a few models in the Jeep lineup that have sticker prices of over $100,000.00.
Now the auto manufacturers are not totally to blame for the high sticker prices. President Biden and the Democrat Party are obsessed with EVs. They believe they are the only way of the future. But it seems that reality is getting in their way to achieving their goal. EVs require all new infrastructures. This alone is costing manufacturers hundreds of billions of dollars that can only be had by raising prices on their current lineup of gasoline powered vehicles. And the EVs themselves are way more expensive that the cars and trucks they are supposed to replace.
So when the average consumer sits down with a car salesman and works through the numbers, a shocked look quickly appears on the consumers face. When purchasing that $76,000 Jeep and trading in their $20,000 used vehicle, a payment of around a $1,000 a month quickly destroys any hope of making the deal. This scenario has been playing out for a couple of years now.
And behind the scenes, a quiet tsunami has been building. Many people were forced into accepting terms like these when the inventories of cars and trucks were tight. They accepted these $1,000 a month payments only to quickly realize that they can’t afford these high payment for the long term. Currently, repossessions have climb to new highs. In fact, some banks are paying repo companies bonuses in order to get their vehicles repossessed due to a lack of enough repo agents.
With inflation still at the higher levels of the Federal Reserve desired range, it seems high interest rates will continue. Along with the timeline for automakers to switch to EVs is fast approaching, making the idea of large price decreases not look feasible. This leaves the American consumer staring at the quietly slipping away of the American Dream. Current estimates have spoken of as many as six out of every ten American consumers not being able to purchase a new car or truck.
President Biden and the Democrat Party are still spending trillions that are being financed by debt making it almost certain that interest rates will not fall any time soon. The real question is, will Americans rebel at Democrat policies that are locking them out of participating in the American Dream.