Part of an article by Neil Reynolds in todays Globe:

Expressed in 1950 dollars, U.S. median household income in 1950 was $4,237. Expenditures came to $3,808. Savings came to $429, or 10 per cent of income. The average new-house price was roughly $7,500 – or less than 200 per cent of income.

By 1975, however, it took 300 per cent of median household incomes to buy a house; by 2005, 470 per cent. (With house prices battered by recession, it now takes 360 per cent.) So what happened in the early 1970s? The U.S. continued to record rising real-dollar productivity and rising real-dollar GDP. But real-dollar household incomes stalled. Various explanations have been advanced. Some economists, for example, have suggested that 1975 marked the beginning of the transition to a Sino-American global economy. But one radical thesis is more persuasive these days: president Richard Nixon’s decision in 1971 to end the U.S. dollar’s last link to the gold standard.

Mr. Nixon’s embrace of paper money, says Llewellyn Rockwell Jr. (founder of the Ludwig von Mises Institute and onetime congressional chief of staff for Ron Paul, the libertarian candidate for the Republic presidential nomination), sabotaged “the great American wealth-building machine.”

Mr. Nixon took the country off gold so that it could pay off debt with inflation, Mr. Rockwell says. In doing so, he wiped out people’s savings and devastated the capital base of the economy. “No longer,” he says, “can one generation of Americans expect to live a better life than the previous one.”

By this thesis, the second income in the two-income household provided “an escape hatch” that prolonged the American dream for another generation. In the end, it took two salaries to equal the purchasing power of one. The mystery of the demise of single-income household sustenance may not yet be solved but we do have a suspect that looks as guilty as sin.