I think the truth is that being a dual income no kids professional couple is a pretty fun life and lots of people don’t want to sacrifice that by raising kids.
My wife and I have one infant, and want another. I make around 117k/year pre-tax. Rent for a 3 bedroom townhome is 2500/month, that's roughly half my monthly take-home pay. Everything else comes out of the other half.
I contribute enough to my 401k to get my employer match, but no more. I'm putting $250/month into my daughter's 529 based on similar calculations for what a decent 4 year degree will cost (a little north of a 100k). I max out our HSA to make the high deductible health plan worth it. We don't eat out that much. I drive a 23 year old hand-me-down Toyota. Things still add up fast if we don't keep track. There's not much left over at the end of the month. And there's going to be another $250+/month when the other kid comes along.
We're not living in poverty by any stretch, have no debt, and can afford some minor luxuries. But it's a lot tighter than it was for my dad working essentially the same job at the same age. I'm curious as to the levels of credit card debt in your moderate income neighborhood, and how prepared they're going to be for retirement at their current savings rates. Or perhaps they just don't expect to pay for their kids' college at all, and are just hoping they don't get sick.
We've already sacrificed the vacations and expensive restaurants. Should we sacrifice our HSA and kids' college funds as well so we can have 3 instead of 2?
Saving your wealth to give it to your kids when they older is good and noble, but not having kids just because you cannot furnish them with enough wealth for when they are adult, is really silly and counterproductive.
Similarly, you might reconsider maxing HSA, depending on how much you spend. HSA has two benefits, a direct one which is tax savings, and the indirect one being actually forcing you to save money, which is useful for many people who are bad at planning and looking ahead. The latter doesn’t apply to you, obviously, if anything you’re overthinking it. On the other hand, with your earnings, and assuming two kids, using HSA gives you around 20% discount on actual healthcare spend. Take account as to how much you actually spend on healthcare, and consider whether saving 20% on that is worth not having extra kid.
It is my responsibility as a parent to ensure my children are as equipped to prosper as possible. They should not have to endure decades or potentially a lifetime of un-forgivable debt for what has become an almost fundamental requirement to be middle class. Expecting 18 year olds to get a job and pay their own way is no longer realistic unless you are fine with your kids being shut out of most economic opportunities. I hope it'll be more realistic in 18 years, but I can't count on that.
Call me silly if you want, I'm just adapting to the way things are. I'd rather have two kids with full opportunities than four kids with 20% opportunities.
As for the HSA, having seen my mom fight cancer for over a decade I'm well aware of how much healthcare can cost. Even with out-of-pocket max limits, it'll be a while before I feel comfortable not maxing it out.
Second thing is that you need to understand how cost of college works: basically, schools offer a lot of financial aid, but only to those who cannot afford it otherwise. This means that the more you save for your kids college, the higher the bill will be. The schools will ask your kids how much money they have saved, and will adjust the price to extract all of it. The system favors the people who don’t save, and people like you pay the cost. You are literally hamstringing yourself, thinking that it’s for benefit of your kids, but you’re actually benefiting people who don’t plan and live day by day.
Which is the real problem. The U.S. sent a man to the moon with a work force that was just 8% college graduates. Do most people really need a college degree today, or is it just useless and very expensive gatekeeping? Why does a receptionist need a college degree? Even many white-collar jobs that involve working with computers could probably be done on an apprenticeship model. Does doing online marketing really require a 4-year degree when being a nurse or an HVAC technician doesn't?
Woah, in what field? There's no way a PI in STEM will have that happening today, or for the last 40 years really. Also, where was you dad having to pay for a PhD? In the US at least they are free and almost always have been.
Most developed countries have free education including university. I went to college for free.
Don't all those millions of young people value their education?
That is also the case in the US, when a comparable share of the student body is offered scholarships (~1/3 of students)-- that's what happened to me, I never paid a penny.
What we are talking about here is those who would never be eligible for a university education in "most developed countries" being able to buy their way into the classroom in the U.S. Others are able to get scholarships to a local university but prefer to buy their way into a more prestigious or desirable university. For example, many are offered tuition wavers to a local community college but prefer to pay to enter a different institution. Or they are offered a tuition waiver for a local university but prefer to go to a more expensive private university, etc. There is a whole chain of selectivity.
Whether or not this is a good idea remains to be seen. More and more, people are coming to the conclusion that the cost isn't worth it.
There is a second issue about whether American universities are actually good (from the point of view of the student) compared to the rest of the world, or whether they are good (from the point of view of select faculty) because they have such huge budgets. Here, too, the situation is mixed (and deteriorating).
I'm not really mollified by liberals arguing that we need more immigration to address this. I'm not anti-immigration by any stretch, but it feels less like a policy to fix low birth rates and more like a bullet point on a list of "good things about immigration".
The EU has generally tried to incentivize getting pregnant and having kids with social programs, but if it's having an effect it's pretty slow going, and my guess is that spending will have to increase pretty significantly to get back up to replacement rate. Even so, I think this is the correct policy because I buy what the World Economic Forum wrote about this [0]: urbanization and women having careers puts pressure on having kids. Your choices here are: make it even harder for people to live in cities and for women to work so they give up, or make it easier so they feel less pressure.
The US politics here are weird. Liberals are trying to do things like write a right to day care into the Constitution, conservatives are doing the same with the 50s housewife dynamic, no one's sure urbanization is an unqualified good but it seems unstoppable. I think the EU is making progress because they have broad agreement on socialism; the US can't move forward because they have this mostly unresolvable argument about what kind of society the government will invest in.
But, and now I'll get on my partisan horse for a second, the kind of social engineering conservatives are engaging in is pretty odd. In a liberal, democratic society your government ought to support your lifestyle unless it's demonstrably damaging, and I don't think things like being a same-sex couple or being a woman in the workplace are demonstrably damaging. I guess someone somewhere might make religious arguments or something, but being gay is super accepted in the US as is working as a woman, so those arguments seem pretty fringe. Consequently, I don't really see any justification for trying to achieve this kind of social engineering through public policy. It feels deeply anti-liberal, and downright homophobic and misogynistic.
[0]: https://www.weforum.org/agenda/2021/06/birthrates-declining-...