Father in law question.....

Recently my father in law moved in with us, after the death of his wife. We live in a small house, and including him, there are 8 of us living there. (myself, wife, 2 teenagers, 3 small children, and finally father in law). My wife insisted that he live with us, even though he had other children to move in with, all of whom had larger houses and fewer occupants. I voiced this feeling to her to no avail. She wants him there with her, I think mainly for her own peace of mind.

In my opinion, his moving in with us has disrupted my relationship with my wife. We now sleep in the basement (one large room, no dividing walls) with the 3 little kids, while father in law, and the teens sleep up stairs. We have NO privacy, NO private time to talk, he is always in the house, there are so many people living there that you cant help but hearing everything that goes on. When I say anything about there being too many people, she becomes defensive. How can you possibly have a good marriage when there are 3 PEOPLE in it??????
This is ripping things apart, with no end in sight.