Americans today are 60% richer than their parents

I'm not sure where the headline came from, but the income figures in the report are adjusted for family size (and inflation). Since families are getting smaller, this causes an increase in their income measure. The actual median increase was 65% (page 8, line 2).

Several points

The study looks at income, not wealth ("riches").

To maintain a middle class lifestyle, one must today make a proportionally far larger expenditure for housing, education and transportation.

In constant dollars, cost per square foot of housing has increased dramatically (even with the recent declines).

It is now necessary to pay for daycare (due to two-income households) and for college (high school used to be sufficient).

Most households now have two cars rather than one (due to two-income households).

Further, because two income households make commitments based on two incomes, they are not prepared for the loss of income from either spouse, whereas formerly, there was reserve income potential in the stay-at-home child rearing spouse.

The above is mostly summarised from a presentation by Elizabeth Warren here: http://www.youtube.com/watch?v=akVL7QY0S8A

If you want to quibble over the definition of "rich", be my guest.

To maintain a middle class lifestyle, one must today make a proportionally far larger expenditure for housing, education and transportation.

Only if you take a definition of middle class which has inflated faster than economic growth. I.e., if you are 60% richer (in terms of income) than your parents, but you define "middle class" to be 80% richer, indeed it is more difficult to be middle class. This does not change the fact that most people have higher income than their parents.

Also, you are misrepresenting Warren's data (admittedly, she presents it in a very confusing way). The primary necessity which reduces discretionary income is taxes, not housing, child care or automotive expenses.

In Warren's hypothetical, income increased 75%, mortgage expenses by 70% (for a 66% bigger house [1]), two cars in 2010 cost 55% more than 1 car in 1970, and health insurance increased 60%. The biggest increase in expenses was tax, which increased 140%. In dollar terms, the tax increase was larger than the cost increases in housing, automotive and health insurance expenses combined.

http://www.volokh.com/posts/1185883980.shtml

http://volokh.com/archives/archive_2008_04_27-2008_05_03.sht...

By the way, did you notice that Warren claims household wealth increased? I.e., the family has 66% more house and 100% more cars? (Not to mention better health care, an XBox, etc.)

[1] http://www.realtor.org/RMODaily.nsf/pages/News2007032701?Ope...