It doesn't take a rocket scientist to figure this out, but let me bring the macrocosmic train wreck that is occuring in our society and economy down to a one person example.
We have Joe Carpenter. He has built himself a nice middle class American Dream life in a mid sized city. Let's suppose Joe lives in Albequerque. Joe owns his own handyman business, maybe a small commercial shop from which to operate, has a ranch house in a modest subdivision, wife, couple of kids whom he hopes to send to college, several vehicles: one for work, one for his wife to ferry the kids to their after school activities. They like to take a vacation once a year for the family, Disneyland or camping in Yosimite. Something affordable that will create memories for his children.
Joe doesn't have any permanent employees but occasionally will contract a helper when his job is too big for one person to handle. Joe pays his quarterly IRS taxes, property taxes and sales taxes on his supplies. Makes sure his vehicles and home are insured and properly registered. As a self employed person, Joe buys a catastrophic health insurance policy to cover himself and family. He also carries liability and property insurance on his workshop and business. To protect his family, he also has a substantial life insurance policy. In addition to saving for college for his children, Joe tries to put some extra money aside for his well deserved retirement and hopes some day to have his son take over the business.
Joe is an upstanding citizen. Belongs to the Rotary, Chamber of Commerce, coaches Little League and does charity work to improve the local park where his children like to play. Joe's wife is an active member of the PTA and the Library Guild in addition to helping with school fund raising activites.
He charges a fair hourly rate in his geographic area of $35.00. Joe is making progress with a small overhead and also hopes to expand his business in the near future; get his license and employ a few full time construction workers.
We have Jose the illegal allien. Here is where we begin to destroy Joe's life and dreams. Joe is forced to compete for jobs with Jose, the illegal alien. (Before I am accused of racism, it could just as well be Pierre the illegal Canadian or Stefan the illegal Romanian or Muhammad the illegal Somalian. But let's use Jose because it equals Joe.)
Jose doesn't have to pay taxes, he works for cash. He doesn't buy insurance......for anything. Jose can apply for Medi-caid and other social welfare benefits. If Jose is injured on his job, he goes to the emergency room and recieves free medical care and prescriptions. Since his cars are not registered, they are also not insured. If Jose has a driver's license, he most likely bought it on the black market. Jose lives in a place where there are many other men like him who are sharing the costs. His family might still be back in the "home country" or (less frequently) if his family is here it consists of a larger extended family where everyone is working. Now there is nothing at all wrong with this. In fact this is how the Irish, the Italians and other immigrants of the past were able to work and integrate themselves into the society. While Jose might be active in his church, he isn't a contributing member to the local community as Joe and his wife are with their Rotary and civic commitments.
Because Jose, has none of the taxes, insurance or expenses that his competitor has, he can charge much less for the same jobs that Joe would charge. Instead of $35.00 per hour, Jose asks for $20....CASH. Joe loses out on many jobs because people are just cheap. Eventually, Joe cannot afford his shop and has to let that go and tells his part time people he can't hire them any more. He hopes they can find jobs, but knows it won't be at the pay scale that he has been able to give to them. Joe's family won't be able to afford a new car for several more years and he ceases contributions to his retirement and college funds.
You see where I'm going here, I hope.
Joe has to reduce his hourly rate in order to get jobs. He decided to charge $28.00 and work harder to make up the lost revenue. Futher paring down his lifestyle, Joe has to eliminate his health insurance and hope that nothing happens. Of course, when he does this, his insurance agent who also has a small business, loses the income from the premiums that Joe isn't paying any more. The two employees he was hoping to bring on permanently have vanished, up in smoke, just like the American Dream.
Skipping ahead, Joe is now working for cash "under the table", has cashed in his retirement plan, cashed in his life insurance, lost his home....oh and you can forget the kids' going to college. Mrs. Joe can no longer stay at home with the children and works for minimum wage at McDonalds. Soon Joe Jr. will be sixteen and will get a job after school to help out. Of course, he will have go give up his sports program. The youngest daughter at 12 is too young to work, so she just goes home after school and hangs out.
I suppose the good news is that Joe and his family now qualifies for food stamps and welfare.
As more and more 'Joe's' are sucked down, they give up. Why work and beat your head against the wall, when all you have to do is some menial jobs for cash and take the freebies that are paid for by.......who? If the middle class has disappeared into the permanent SERF class, where is the money going to come from. Where are the future builders, inventors, entrepeneurs, skilled labor classes going to come from? Since Jose and his family don't really plan to become part of the American culture because they are illegal aliens, they don't learn the language and who needs anything more than an elementary school education anyway.
The other sufferers here, besides Joe and his family, are the community. No more Rotary or Library Guild participation. The schools, Jose and his wife don't speak as much English so don't participate in the PTA. The insurance agent with the cancelled policies, the investment advisor who has no more business, the hardware store where Joe can't shop anymore, the auto dealer and manufacturer where Joe will not be buying new cars, the vaction spot where Joe used to go, the taxes that Joe used to pay....... so on and so on...... like a giant snowball going down hill, destroying the economy faster and faster, the American Dream is dead for the middle class.
Of course, there will still be people of means. The wealthy will still be with us, as will the poor. There will be fewer wealthy with much more concentrated wealth per capita, employing the Serf class at very affordable wages. The nanny, the gardener, the brick layer, Joe (our carpenter) all vying to see who can get the job at the lowest cash bid.
What will be missing is the vibrant middle class represented by Joe's extinct and enviable lifestyle. What will also be missing are all of the people Joe could have employed, the industries and businesses he contributed to which also employed others. What will be missing is the hope of a better today for ourselves and a brighter future for our children.
Serf city, here we come........