When a governments screws up its country’s economy with feckless policies, invariably it will start running up the debt. This in turn destroys the middle class. From Charles Hugh Smith at oftwominds.com:
Unfortunately for those at the top who’ve benefited immensely from speculative bubbles, speculative bubbles don’t create a vibrant middle class–they push what’s left of the middle class off a cliff.
What exactly is the Middle Class and what unique role does it serve in the economy? Given that the Middle Class is constantly invoked by politicos and economists, you’d think the status quo had a solid understanding of the Middle Class. Alas, it isn’t that simple.
The conventional view defines the middle class by income, education or type of labor being performed. These are all superficial attributes and ignore what actually differentiates the working class from the middle class. Yes, the middle class tends to earn more, have higher educational credentials and perform white-collar labor rather than blue-collar labor.
But getting a higher education credential and increased pay doesn’t automatically provide a middle class role in the economy, nor does performing white-collar work. None of these automatically moves the individual up the social mobility ladder from near-zero ownership of capital (working class) to meaningful ownership of productive capital (middle class).