Obama On American Sacrifice

When it comes to “Economics and Sacrifice” in 21st Century America, the choices and the sacrifices individuals are forced to make vary widely based on economic status and their level of income. For most middle class Americans (earning around 50,000$ a year), parents may choose to send their children to a public school instead of a private school to avoid the cost of private school tuition. Another sacrifice some families will make might be to delay their retirement in order to send their children to college, or to drive a less expensive used car instead of a new one.

Those are some examples of sacrifices families are currently making, but there are also ends of the spectrum that must be discussed. The income levels in the United States vary widely, therefore the decisions families are forced to make related to their finances differ greatly as well.

For the wealthiest of Americans, their tough choices might consist of driving a used BMW instead of a brand new Mercedes. Another example wealthier Americans may be forced to make may revolve around their retirement destination. Some retired couples, if faced with financial problems, might choose to retire to a condominium in Florida instead of their originally planned beach front home in California. I have family friends that were faced with this exact decision. In 2006 their plan was to retire and move to a beach front property in California, but after losing a lot of money during the financial crisis in 2008, they were forced to sacrifice that beach front home and have since decided to retire to a smaller condo in a less expensive town in Florida.

Left car: New Mercedes and the car on the right: BMW

The other end of the income spectrum would be those living in poverty. For example, CBS did a special television show entitled “Homeless in America”, where they interviewed families living in Florida that were forced to make some terribly difficult sacrifices. According this article, there are 16 million children in the United States living in poverty. For these families, the sacrifices parents are faced with are much more drastic. For example, the Metzger family portrayed in the article above sacrificed hot showers and bathrooms because they were forced to live in a truck after their house was foreclosed on.

"Homeless in America" Metzger family
Money sign

The economic sacrifices and decisions that families in America are faced with vary widely depending on their level of income and their current standard of living. For the upper income earners the choices may not seem too devastating, but for those living in poverty the decisions may be overwhelming. For most Americans living in the 21st Century, we have higher livings standards and a better quality of life than the rest of the world, yet we are still faced every day with decisions and choices in which we are forced to sacrifice for one thing or another. After all, economics is all about choices and sacrifices. Investopedia defines economics as: “A social science that studies how individuals, governments, firms and nations make choices on allocating scarce resources to satisfy their unlimited wants.” When people have unlimited wants and only a certain amount of resources (money), we are forced to make decisions on how we allocate those resources.

After doing some extra research, and talking with my older brother who is a senior finance major at Miami University’s Farmer School of Business, I learned a lot about some sacrifices that organizations are making in order to stay in business. Many companies have frozen their employees’ salaries or even had to lay off workers in order to stay in business during the recent financial crisis in 2008.