The average middle-class person works hard but can't achieve the American dream anymore. High health-care and education costs, aggravated by persistent inflation, overwhelm him. Big American employers, facing shrinking profit margins and foreign competition, are cutting back on everything. So there are no more lifetime job guarantees, and benefits are fewer.

Even many well-educated, seemingly successful Americans, who have had many decades of good incomes, now live on the edge. They subsist on the reduced income of faux jobs, part-time work that appears and disappears with the regularity of a pol changing positions on the stump. Almost all of us are just one step away from financial disaster. Such is the thesis of this interesting but flawed book by a national economics correspondent for the Los Angeles Times.

Journalist Peter Gosselin tells numerous stories of middle-class and sometimes well-heeled individuals who fell into financial woe, stemming in part from radically varying incomes due to job shifts. And it usually is because of the failures of their employers, he argues, or because of some deep societal problem in which the average person is dwarfed by the challenges of retirement or insurance planning. Most of these unfortunate people are well educated and seem responsible. Still, Gosselin doesn't spend much time examining their use of credit cards and how much they save.

These difficult situations combined with ubiquitous inflation are destroying the average person's crack at the American dream. So Americans, the author adds, must revert to a Mayflower tradition. They must join together to save themselves.

"For most Americans alive today and for their children, restoring the sense of mutual obligation embodied in the Mayflower Compact nearly 400 years ago is likely to be the defining challenge of our time," Gosselin writes. Americans are economically insecure. Therefore, we must join together and solve our problems.

And, using the principles of pooling risk that were invoked in the federal government's first modern welfare program, Social Security, the nation must find ways to arrest this insecurity. Gosselin protests that he is not advocating "utopian, collectivist schemes," although the logic of his critique points to more government. Instead, he says, lapsing into utilitarian philosophy, the task is "to work within our present system to reset the balance point between what's acceptable as good for the individual and what must be recognized as good for the many."

The operative word in the last sentence is "must." It, like the often-used public policy word "investment," usually means some sort of new mandatory government program or an extension of an existing one. And, of course, all this means additional government spending, bigger deficits and a higher inflation rate. And the latter constitutes a little recognized rising tax on the people Gosselin is most worried about. That's because the government, like tens of millions of Americans, more and more pays for things by borrowing. It passes on the debts to unborn taxpayers.

It was policy that could be justified in World War II, but that war did end. At some point, today's game of spending and taxing must stop. The consequences of the scam are already evident today, which is why this is a timely book. How much is this credit card spending mentality affecting the average person, the subject of this interesting book?

It is an issue that should be endlessly debated (along with high payroll taxes, which also hurt the middle class and the working poor), but is usually ignored in mainstream media. Times, relatively speaking, are hard. (I say relatively because many of our grandparents who lived through depressions and wars would likely look at our living standards and problems today and say they are not problems.)

Still, it's hard to dispute that Gosselin has made some good points analyzing a serious situation affecting tens of millions of Americans in the wealthiest nation in history. He raises a fascinating paradox. "How can the United States as a nation be growing more secure in its prosperity-as it has been doing until recently-even while many, perhaps most, Americans are becoming less so?"

What About Our Culture?
Our values today are so different from those of our grandparents and great-grandparents who made tremendous sacrifices so we could live much better than they did.
This is the factor that few writers, even of Gosselin's considerable talent and intelligence, want to tackle. It's too painful. It reeks of fixing blame in a relativist society in which many of us have been taught that no one is responsible for much of anything. Maybe it is because looking at our culture means looking at ourselves. And it is always easier to blame problems on others than to look at ourselves. When is the last time you heard a major presidential candidate blame the government's trillions of dollars in red ink on the voters who consistently returned big-spending presidents and Congresses?

Gosselin never examines culture in this serious book, which is backed by considerable documentation. Here's an example of the oversight: Gosselin neglects savings rates, which I believe tell us much about the economic state of America in 2008.

We often live in big houses and drive big cars, but what about the big loans we have taken out to pay for them? And what about the average person's financial assets? True wealth comes from savings and the growth of investments.

It seems clear that those nations with the most dynamic economies have the lowest capital gains rates and highest saving rates. Their costs of capital, interest rates, can be much lower than ours since their savings pool is growing, while Americans today must access foreign savings. This is a sea change in our economy and in our culture, a culture that has greatly changed in the last few generations.

I thought about this dramatic change when interviewing CFP Lew Altfest, a New York advisor to the well-heeled, a few years ago. A growing part of his business, whose typical client earned $75,000 to $250,000, was credit counseling! Things have really changed, I thought, in a nation that once valued thrift.

Over the last 30 years we have gone from being a people who saved a fair amount to being a people who don't save at all. And go back 30 years beyond the 1970s and we were a people whose huge savings rates ensured that living standards after World War II would become the envy of the world. What happened?

I believe that a culture that celebrates consumption-a culture abetted by Keynesian economics that emphasizes spending and cheap monetary policies as the road to wealth and, by the way, electoral success-dramatically changed us. One doesn't even have to debate the merits of a socialized medical system or other expansions of the welfare state to understand culture's importance.

Indeed, one doesn't have to be an enemy of the welfare state to have the common sense that our grandparents had. This common sense tells us that, without a booming economy in which people want to save and invest and in which only a few take on frivolous debt, there will be no debate over the welfare state because it will shrink.

What will happen to the average person while he or she is hopelessly in debt along with a bankrupt government? It's a question that Gosselin should take up in his next book.