Charles Hugh Smith: Why the U.S. Middle Class Is Doomed

Elizabeth Warren has contended that the U.S. middle class has been subjected to a dismantling, as posted.

This is not limited to the U.S. As I have discussed many times, the Korean middle class has dwindled as well. For example, according to the National Statistical Office of Korea, Korea’s income group structure is showing a rapid change from a middle class-strong jar shape to a poor class-strong pyramid shape.

The erosion of the middle class leads to the deterioration of the democratic system, which is a lot hard to rebuild.

The silent coup continues while many economies are showing signs of cracking. This is no ordinary cyclical recession.

Again, policy choice should be closely aligned with the nature of the society it wishes to encourage. It is critical for the middle class to be solid and empowered.

From Of Two Minds:

The Federal government is supporting its dependents and its crony-capitalist Elites with borrowed money: $1.5 trillion every year, fully 40% of the Federal budget. It is in effect filling the gap between exploding costs and declining income, just like the middle class did until they ran out of collateral to leverage.

The dwindling middle class, now at best perhaps 25% of the workforce, has been reduced to tax donkeys supporting those above and below who are dependent on Federal largesse.

Fisher found that this cycle ends in transformational political upheaval. No wonder; even as the class paying most of the taxes shrinks and is pressured by higher costs, the class of dependents expands as the economy deteriorates and the super-wealthy Power Elites continue to control the levers of Central State power.

http://charleshughsmith.blogspot.com/2012/04/why-middle-class-is-doomed.html