The Way Back

Is the American Dream dead, or can it still be revived through key systemic changes in education, the economy, and the justice system?

1. Poor Public Education Holds Back Social Mobility and the Economy

America's public education system has regressed drastically over the years. Skills in math, literacy, and geography have diminished, leaving the country lagging behind international standards. In 1912, eighth graders were expected to confidently identify geographical routes across continents. Today, such knowledge is a rarity even among adults.

This failure in education traps lower-income families in a cycle of poverty. Stanford economist Eric Hanushek's research shows that poor education access equates to poor opportunities for social mobility. In America, the wealthiest communities enjoy the best schools while low-income families settle for subpar instruction. This imbalance means that children born into poverty rarely move up in life.

A failing education system also places long-term economic strain on the country. Hanushek's studies reveal that bringing American education to the level of Canada's could dissolve the U.S. debt crisis while raising average worker earnings by 20 percent. Unfortunately, as public schools falter, private academies excel only for a privileged few.

Examples

• U.S. test scores fell from 25th to 31st in math between 2009 and 2015 across 65 nations.
• Children from affluent areas attend better-funded schools, exacerbating inequality.
• Improving public school standards could potentially increase U.S. workers' collective earnings.

2. Wealth Dominates Higher Education and Admission Policies

Access to higher education in the United States heavily favors the wealthy. Financial donations by affluent families pave direct paths to elite colleges for their children, even when their academic performance doesn’t measure up.

Standardized testing doesn't level the playing field. Rich families, who can afford private education and tutors, score significantly higher on standardized exams like the SAT. Children from low-income families scoring far lower than upper-middle and high-income peers demonstrate the disparity built into the system.

Even for capable students from low-income backgrounds, staggering tuition fees make higher education unattainable. They may get into a top school but rarely can they afford the cost of attending, keeping prestigious education exclusive to the wealthy.

Examples

• Well-connected students like Al Gore III got into Harvard despite weak grades.
• Families earning over $200,000 achieve average SAT scores nearly 400 points higher than those earning below $20,000.
• Tuition affordability prevents low-income students from attending elite schools even when accepted.

3. Flawed Immigration Policies Drain Opportunities

The United States’ immigration policies aren’t making full use of potential skilled labor. With family preference policies, the majority of immigrants are admitted based on family ties rather than language skills, education, or work qualifications.

Countries like Canada have developed efficient systems for welcoming skilled immigrants. With a point system evaluating education and work experience, Canada has made two-thirds of its immigrant workforce highly skilled. In contrast, U.S. immigrants take four generations to close wage gaps with native-born workers, compared to just two generations in Canada.

Extended processing times further complicate matters. U.S. immigrants spend years in limbo, awaiting residency approvals. This delays them from pursuing stable jobs and education, underutilizing valuable talent that could boost the economy.

Examples

• Canadian immigrants outpace U.S. immigrants in matching native work incomes.
• The U.S. admits two-thirds of immigrants based solely on family ties.
• Canadian immigration decisions tend to take months while U.S. delays last years.

4. Unnecessary Licensing Crushes Fair Competition

Occupational licensing in the United States is excessively expensive and unnecessary for many jobs. Instead of benefiting the public, licensing requirements function as barriers for individuals trying to break into industries, often protecting well-established insiders.

Simple professions, such as yoga instructors or tour guides, now demand licenses costing thousands of dollars and extensive paperwork. These barriers discourage aspiring businesspeople and stifle innovation. For small entrepreneurs, resources spent meeting license demands could have otherwise gone toward creating better products or services.

Between 1950 and today, the share of professions requiring licenses increased sixfold, hurting competition and leaving poorer individuals unable to afford entry fees into their fields of choice.

Examples

• Virginia yoga instructors must pay $2,500 in licensing fees.
• Licenses now apply to one in three workers, compared to one in twenty just decades ago.
• Inspectors fined and closed Orlando barbershops under questionable licensing standards.

5. Tax Loopholes Favor the Wealthy and Big Corporations

The U.S. tax system is riddled with gaps that let the rich pay less while contributing less to federal revenue. Corporate tax rates have plummeted over the last sixty years, dropping from 32 percent to just nine percent of federal revenue.

With tax advisors, corporations like General Electric exploit these loopholes to avoid taxes entirely, regardless of their multibillion-dollar earnings. Executive compensation is another issue. While many CEOs report modest salaries to avoid public criticism, they earn millions through bonuses and untaxed stock options.

Even worse, companies can deduct executive salaries from their taxable income, costing the government billions, while workers struggle under the burden of income tax normal wages incur.

Examples

• Corporate taxes fell from covering 32 percent to just 9 percent of federal revenue from 1952 to 2009.
• General Electric used deductions and overseas accounts to avoid paying taxes on $14.2 billion in profit.
• Executives avoid scrutiny by shifting compensation to lower-taxed options like stock.

6. Arbitrary Laws Enable Unjust Punishments

The unpredictability of U.S. law means that ordinary citizens may break laws unknowingly. Individuals have been imprisoned for minor clerical errors or misunderstood regulations. For example, Krister Evertson served two years in prison for improper sodium storage, after being arrested over a missing shipping label.

Federal agencies also conduct unwarranted raids under these vague laws. Barbers in Orlando faced armed inspections, not for criminal offenses, but minor perceived discrepancies in licensing requirements.

Such misuse of legal power shakes public trust and discourages entrepreneurship, deterring skilled workers from investing time or money in industries bound by overwhelming regulations.

Examples

• Krister Evertson's sodium-storage error led to imprisonment for years.
• Florida barbershops faced armed law enforcement over petty license checks.
• Federal investigators arbitrarily apply arcane laws to small businesses repeatedly.

7. Prosecutors Exploit Power to Target Businesses Unfairly

U.S. prosecutors wield unchecked authority, often using grand juries to coerce businesses into settlements without defending their reputation in open court. These unchecked powers turn simple investigations into damaging probes lasting years.

As the Enron scandal unfolded, prosecutors targeted not just the guilty company but its accounting firm, Arthur Andersen. Despite minor infractions, Andersen's indictment resulted in the loss of 28,000 jobs.

Grand juries give prosecutors overwhelming advantages. No other developed country prosecutes corporations as aggressively or as often, placing American businesses at constant legal risk.

Examples

• Arthur Andersen collapsed under minor accusations tied to Enron.
• Prosecutors rely on vague grand jury evidence standards, including hearsay.
• Legal settlements prioritize reputation over genuine resolutions for corporations.

8. Even Celebrities Fall Prey to Prosecutorial Overreach

High-profile Americans are not immune to the legal system's flaws. Martha Stewart became a target of relentless prosecution in the ImClone stock case. She served prison time for covering up a legal stock-sale tip, which was not illegal itself.

Prosecutors similarly bent rules to convict Wall Street star Michael Milken under new stock trading laws invented during his case. His innovative bonding strategies boosted the economy, but he was fined $600 million and jailed regardless.

These cases reflect a justice system that undermines fairness by using its power arbitrarily, even against successful figures.

Examples

• Martha Stewart served five months for incidental actions amid a larger stock case.
• Michael Milken’s economic contributions were disregarded in his prosecution.
• High publicly targeted trials set damaging precedents for entrepreneurial risk.

9. Systemic Reforms Can Revive the American Dream

To revive the American Dream, systemic reforms across education, immigration, and taxation must occur. Public schools need equalized funding and resources. Work-based immigration can expand economic opportunities. Closing tax loopholes will ensure the wealthy pay their fair share.

Bringing transparency and fairness back into foundational systems could reignite hope in equitable social mobility. By addressing these issues simultaneously, America’s declining prospects for ordinary citizens and entrepreneurs can change course.

Examples

• Closing tax loopholes ensures revenue sustains public services equitably.
• Work-centric immigration mimics Canada’s labor success story.
• Educational equality lifts social divisions hindering long-term growth.

Takeaways

1. Advocate for equal education funding to ensure public schools match private standards.
2. Push for work-based immigration policies to attract skilled talent.
3. Demand simplified tax policies to curtail loopholes used by corporations and the wealthy.