That's a graph of how much "stuff" an average person created in a year, from 1790 to 2005 (measured in inflation-adjusted dollars). Our economy has been growing at somewhere between 2 and 5 percent a year.
If our economy continues growing at an average 2% per year (after-inflation) rate, then in 40 years the average family in America will make over $100,000 per year.
If our economy grows at an average 3% per year, then they'll make over $150,000 per year (again, measured in "2007 dollars").
What will our kids do with all that extra money? They'll be making between two and three times what we do! (2006 median household income is $48,000/year)
I predict that they'll be spending money on:
- Private schooling for their kids. With more disposable income, I think people will send their kids to better schools. I really hope education policy catches up with that trend so public schools don't become a place where only poor kids go.
- Services like housecleaning, catered parties and personal chefs will all be booming businesses.
- Donations to charity will increase. I'm actually hopeful that we'll move from a culture of "my car is bigger than your car" to "I gave more last year than you did."