Has the American Dream Become a Nightmare?

by Joe Plemon on May 13, 2011

A reader recently shared these thoughts with me, “My husband and I are from the ‘great depression era’, which always meant if at all possible, don’t go in debt.  For the past 10 to 15 years we have watched people as they lived ‘the American Dream’. To us it was watching them as they lived far above their paycheck. Then reality hit and, by the thousands, have lost everything.

This letter challenged me to ask, “What exactly is the American dream?”  My ensuing research reveals that this definition has changed over the years — and not for the better.

The original American Dream

America’s Founding Fathers gave us their meaning of the American Dream in the Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness”…

Note that wealth and materialism were totally absent from this definition.  In fact, many of our founders gave up their wealth to pursue this dream … a dream of a land where the people were free to pursue happiness.  This very pursuit, I believe, constitutes the dream.  It is an ongoing endeavor, for the moment anyone quits pursuing happiness, he also quits dreaming.

The Dream Today

Now…fast forward to today and ask yourself  how you would define the American Dream.  In fact, ask anyone you know how they would define the American Dream.  My guess is that it had something to do with owning your own home.  Assuming I am right, read on.

The Dream Becomes a Nightmare

Many, in their zeal to achieve this dream, purchased too much home.  Then, as the real estate bubble burst, they found themselves irreparably attached to their house, making the ongoing payments as long as they were able or facing the prospect of foreclosure if a hiccup disrupted their income stream.  The dream, for many, has become a nightmare.

But, as horrible as this financial nightmare is, I believe the change of the dream has produced an insidious nightmare which is much more prevalent.  We have substituted brick and mortar for the dreams of pursuing our passions, discovering our gifts and using those gifts to make this world a better place.  In losing the original dream we have compromised the zest for life that America was once known for.  We have also compromised our honor.

Don’t misunderstand me — we own our home, but doing so does not fulfill my dreams.  Like the founders, my dream is to discover and live out my purpose for being here on earth.  I pray that you too will adapt the original American Dream.  Anything less is second best.

That sounds like a nightmare to me.

As I researched this topic, I came across the following blog posts that are well worth the read.

Readers: How do you define the American Dream?  Has this post changed your thinking in any way?  If so, how?


{ 20 comments… read them below or add one }

Little House May 13, 2011 at 8:49 am

Thanks, Joe, for including my link! It was an article I wrote a while back that is very pertinent as the real estate market continues to tank and stagnate.


Darren May 13, 2011 at 11:00 am

Good point about the importance of the pursuit.

My dream is to love the work I do, and have everyone in the world do the same. All of us figuring out our strengths and passions, and living that out in a spirit of service.

Not seeking money for the sake of money, but to allow us to chase our dreams. Not thinking that I have to wait until retirement to live the dream life, but realizing we can have joy now.


joeplemon May 13, 2011 at 1:58 pm

Little House,
I was glad to include your article. Your angle of the misrepresentation of home ownership we see on TV and in the movies is still pertinent.

Ahh…a kindred spirit! What if the entire nation reverted from our current dream to the original dream? As you say so well: “All of us figuring out our strengths and passions, and living that out in a spirit of service.” Would our land not be revitalized? Am we overly idealistic? Maybe, but it beats settling for status quo!

Good point. I wonder how many people borrowed to the hilt just because the lender said they qualified?


dido May 13, 2011 at 8:28 pm

“my dream is to discover and live out my purpose for being here on earth. ”
do you know what this purpose is? if you are really looking for it i have something for you 🙂 i will be glade to share it with you
thanks for the article


optionsdude May 13, 2011 at 11:00 pm

It is a shame that the American Dream has become synonymous with home ownership rather than the freedom to pursue your passions and live a meaningful life. I am fortunate in that I am able to receive payment for doing something I love even though there may be some days when it can seem difficult to get moving in the morning.


Hunter May 14, 2011 at 9:01 pm

Thanks Joe, I can identify with the shift you are describing. I think a lot of kids fall into the trap of trying to live at the standard they are used to at home when they moved out, forgetting that it took a lifetime for their parents to achieve that quality of life. It takes an adjustment to really live according to your paycheck.


Super Frugalette May 14, 2011 at 9:23 pm

I think the concept of the “American Dream” has been a bit broadened in my generation. I am from the generation where a college degree is no longer “distinctive”. Thus, everyone who wants to get anywhere needs a “master’s degree”. Thus living the “American Dream” was obtaining the degrees needed to gain a high paying job…and a nice home is a by product of strong earning power.

For these people, the cost of their home was not unreasonable in proportion to their income. However, when the bubble burst and unemployment hit, it became impossible to make the mortgage payments.

I think there is a bit more to the issue than the desire for the American Dream…


Barb Friedberg May 15, 2011 at 5:17 pm

Joe, Overconsumption is not equal to the American dream-yet many act as if it is. I like your definition of pursuing one’s passions & opportunities.


joeplemon May 15, 2011 at 7:45 pm

I love hearing of people who love doing what they are doing. You remind me of Stan Musial, my all time favorite baseball player, who once said, “I am very fortunate to be paid to do something I love to do.”

Yes, we can see a huge shift in the past two generations. Easy credit, get rich quick and “have it now” are all a microwave formula for a nightmare. We need to bring financial crock pots back!

While I am all for college degrees (I have one myself), I also believe that many have been duped into believing that the piece of paper is a guarantee of a successful career. Not necessarily so. You are right to point out that many who have experienced the real estate nightmare did not take out unreasonable loans. They were in the wrong place at the wrong time. Still…my point is that home ownership should not be the American dream in the first place.

It is crazy how doing something unhealthy (over-consumption) is considered by many to be the American dream. Sounds like a nightmare to me.


Miss T @ Prairie Eco-Thrifter May 16, 2011 at 1:59 pm

After spending a month in Asia, I have come home with a whole new list of priorities. It is amazing the things we stress about in North America that the rest of the world doesn’t. We need to start living the simple life. We will be much healthier.


ross @ great credit May 16, 2011 at 5:38 pm

I feel like you can never get complacent about your finances. You have to have alot of back-up plans, because things can always go wrong. Everyone wants to live well and be happy, but living above your means is never sustainable. You should never feel like you “deserve” a certain lifestyle.


joeplemon May 18, 2011 at 10:23 am

@Miss T,
Just being there (spending time in other cultures) can be revolutionary. Just curious: which priorities changed after your time in Asia? And do you think these will be long term changes?

Well said. I especially like, “you should ever feel like you deserve a certain lifestyle.” I wish Congress would heed your thought that living above your means is never sustainable. How true!


van025 May 24, 2011 at 8:41 pm

American Dream is also A Dream of many people that have never lived in America yet.It will be broken when they put their feet on that land because A dream is only a dream


joeplemon May 25, 2011 at 3:58 pm

Are you saying that dreams don’t come true? That we are better off not acting on those dreams because reality will be a disappointment?

Has this happened to you?


Joe Morgan June 7, 2011 at 12:05 pm

I too can relate… I’m in my 30’s and have grown up with the understanding that the American Dream was having the opportunity – not the guarantee – to have a better life than your parents…. the opportunity to better yourself through hard work and discipline.. you know, generally enjoy the fruits of your labor.

I see a lot of kids in college with the attitude that the American Dream is little more than a basket of perks they are entitled to – a job with a high salary, new car, free healthcare, a nice house when they’re ready – all without working or planning or generally doing the things required to earn those things.

I’d say it’s a generational thing, but I know a lot of baby boomers with the entitlement mentality too… they seem to feel that they are owed a good retirement and free health care simply for living to a certain age, while not having done a single thing to plan for it…


joeplemon June 17, 2011 at 8:15 am

@Joe Morgan,
Good point about the generational thing, especially pointing out the many Baby Boomers have the entitlement mentality. So true. Is it possible that we need to go back at least one more generation to find those who really live out the “opportunity” aspect of the American dream? Maybe the WW II generation … the ones Tom Brokaw referred to as the greatest generation.

By the way, I am a Baby Boomer and my mom (still alive at 91) was a young teen during the Depression years. I have never heard one word from her mouth that she is owed anything.


Joe Morgan June 18, 2011 at 8:57 pm

@Joe Plemon,

It’s funny you mention the WWII generation. My grandparents were the 1st generation of their respective families to be born in the U.S. and were of that generation. Sadly they both passed away during the past ten years. I count myself as fortunate to have had them in my life so long and for the perspective they gave me on many things, entitlements being one of them.

I think it was definitely generational but it’s also based on background. I know many immigrants to the U.S. who are my age and younger (20’s-30’s) who have the same mindset my grandparent’s generation had.

It seems that the longer a family line has lived in the U. S., the stronger the sense of entitlement becomes in each successive generation.

For my part, I make every effort to instill the sense of gratitude and appreciation of opportunity in my children. I like to think its a small way to keep the memory of my grandparents alive, and I frankly think it’s the sort of thing that may be the only way the country is going to be saved from the demise from which it seems headed.


joeplemon June 20, 2011 at 9:34 am

@Joe Morgan,
Great point that the “opportunity” vs. “entitlement” mindset is prevalent not only in past generations but also in current immigrants. I suppose that America is still the land of opportunity, but our nation will unintentionally deplete that drive when children and grandchildren figure out they can have much by doing little.

Keep on instilling that sense of gratitude and opportunity to your children. You will be proud of them as they grow up and become independent. And, like you say, doing so is a great way to not only honor your grandparents but also do your part in helping our country change its direction. You are perpetuating the American dream. Keep it up!


AaronC July 27, 2011 at 12:52 pm

It’s tough when this message has been hammered into our heads from every corner of the US — that home ownership is supposed to be the end-goal for every family. We’re supposed to be an “ownership society.” Check out this article from the Boston Globe from 2004. The CBO said the “zero-down” initiative from the White House “might” cost us up to $500 million over four years because of increased defaults. Ah, if it had only cost us $500 million… Thought you’d get a kick out of the article though:


The scariest quote is at the bottom: “We have no experience of how these loans will perform when the market is weak.”


joeplemon July 27, 2011 at 5:05 pm

Thanks for the link. If only those who thought they were “helping” everyone own a home could have had a crystal ball…What a debacle that mindset brought us! It is interesting though, that some were warning against the Bush plan, saying that it could backfire if home prices ever started going down. A bit prophetic.

It is also interesting that a Republican president was pushing for this plan while a Democrat Senator (John Kerry) wasn’t keen on it.


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