system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Why were people in the USA with regular jobs (teacher, union factory worker, nurse, etc.) able to buy a house, afford university, have retirement savings, and offer their family a secure, stable life in the past but no longer?
gpt
The world you describe is basically the postwar world from the late 1940s through the 1970s, though for reasons I'll get into, the loss of that world was hidden from public consciousness in a variety of ways.

Let's start with the GI generation -- the men that fought WWII and the women who kept the home front going. In the late 1940s the acceptability of a social welfare state that provided at least some of the basic necessities of life to all citizens was pretty widely accepted. A lot of people believed that the descent into fascism and communism was caused by economic instability--people were so desperate for any form of security that they embraced dictatorships of one kind or another.

There was a also a huge fear that with the war ending and war production winding down, the Great Depression would return. So to keep the economy up you had to had people buying stuff, and in turn making stuff for people to buy would keep the factory workers employed who were no longer making tanks and airplanes. 

Part of this was taken care of by the fact that, while a lot of workers (including a lot of women) had made very good money during the war but because everything was given over to war production there was nothing to buy, and everyone was encouraged to give to the war effort by buying bonds, so people had savings.

So to make sure that the economy stayed stable and there wasn't too much disruption, and to repay veterans for their service, several big programs for veterans were put in place. NOTHING like this had existed before the war -- programs to help people en masse attend college and purchase homes. At the same time the idea that the state should subsidize certain things meant that states were building and expanding state university systems while keeping tuition low. The states and federal government were investing heavily in infrastructure which was tilted toward suburban development, so lots of investment in highways that went into urban working centers from places that used to be rural. People could marry, have kids, buy a home AND go to college all at the same time because of GI bill benefits. And they did.

But college isn't for everyone and that's okay because at this time the country still had a robust manufacturing base, unions were strong and negotiated good pay and benefits through collective bargaining (there were problems with this later, obviously but at this point it was largely upside). Basically through various sources that were unique to the time, a larger number of Americans than ever before had more money , access to home buying and higher education for those who wanted it -- plus our economy was roaring because we were the least damaged of all the large trading nations coming out of the war. Not only were our own people consuming everything we could put out, but American products were being exported all over the world.

The bottom line of this was that what we now think of as THE American way of life developed -- wife stays home, raises kids, husband works either white or blue collar jobs (plus the large population still in agriculture), and it was all doable on one income. It's really important to recognize that while it was a good time for a lot of people economically, it was an outlier in all of American history, let alone world history. And so many people being comfortably well off also meant that habits developed that had not been there or hadn't been as prominent as in the past, such as the idea that you had to get a new car every year, upgrade appliances in kitchens and entertainment (radio --> TV --> color TV -->cable etc.) as new latest and greatest came along, etc. 

And this kept going pretty strong all through the 1960s, which means that the Baby Boomers who are now retiring grew up in a time of plenty pretty much from birth through adulthoods. 

The economic growth hit a wall in the 1970s, and there were a variety of reasons. Competition from recovered nations who no longer needed to buy our products because they made their own AND were beginning to export to the US in real numbers. There was a nasty oil shock/shortage in 1973. And inflation hit hard -- it was a huge problem throughout the 70s. Real wages vs cost of living pretty much stalled out in 1973 and have never gotten back in line again. Right as the Baby Boom generation hit the point where they were settling down, having careers, marrying, having kids etc.  1) the economy got a lot tougher and 2) they were making less money. And it was felt pretty strongly. 

However, several things offset that. Starting in the 1970s, the number of women in the work force began to grow as women got into fields that had not previously been open to them. Gradually a family having two incomes instead of just one became the norm, and it became less routine for women to stay home with kids. The growth of a lot of one-income families into two-income families meant that individual families had more money coming in even if wages weren't rising in real terms. This helped disguise the slip in real income.

Second, Paul Volcker became head of the Federal Reserve and implemented a new fiscal policy to try to break inflation. This is how it was explained on Planet Money last year:

"Volcker believed he had the key to stopping inflation. The Fed's job was to control how much money was in the economy. And Volcker thought it had simply printed too much. So shortly after he took office, he made a big announcement. The Fed was going to tightly restrict the amount of money in the economy. The result - not what he had hoped. The thing he was trying to fix, inflation, got worse. It went from 12 percent up to 14 percent. And meanwhile, the economy started to crash. When you restrict the amount of money in the economy, it gets harder for people and businesses to get loans. So now we had inflation and a recession. Millions of people lost their jobs."

The recession that this brought on lasted through 1982. Then things finally started to get better. Inflation began to drop. It pretty much went away and hasn't been back.

So even with two earners, income still wasn't keeping up with the cost of living. And more people were falling further behind -- farmers, blue collar workers whose jobs were going overseas. Industries like steel and fabric mills and clothes making closing down and taking towns with them. But most people still were mostly making it. Another thing that covered up some of the weaknesses was that credit kept get easier to get. Credit cards, loans, second mortgages, home equity lines -- and people were encouraged to tap them for things like paying for college for kids or even for just vacations. 

In the 90s and 2000s a lot of prices rose slightly or stayed steady. Some things even dropped in real terms. You pay less now for cheap basic items of clothing like tee shirts and sweatpants than you did 20 or 30 years ago because they are made overseas and transport is pretty cheap. 

On the other hand, some things started to rise A LOT. The biggest ones were healthcare expenses -- even WITH insurance just the copays and deductibles of a major illness could bankrupt a family--and education. The housing bubble in the 2000s was insane, and a whole other topic, but people who bought at the peak of the bubble between 2005-2007 were screwed. Many people had gotten and used all the credit they could. And real incomes, after 30-40 years of not really rising, were finally obviously way behind. 

TLDR: In the postwar period there were government subsidies and a set of economic circumstances that brought about the prosperity you describe. Before WWII relatively few people had that kind of middle class economic security. After WWII more people than ever before had it, and it seemed like a permanent thing.

When things started to change in the 1970s, two big trends kept most people from noticing for a long time -- women going to work and two-income families becoming the norm, and more ways to access "easy credit" so that you could keep up with expenses but at the risk of building up debt. Things were getting shakier in the 2000s and the cracks were starting to show but the housing bubble and bust really showed how rickety it all was.