The American middle class is being crushed. A recent piece in the Wall Street Journal tells a terrifying story concerning the state of the most important part of American—and really any—society.
According to the report, much of the issue pertains to the pandemic, savings, and inflation. One principal dilemma is that over the first few months of 2022, upper-middle class families lost much of their stock portfolios compared to people who make more than them, but, since the start of the pandemic, they have also saved less money than those who make less than them.
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The middle class has seen a growth in its liabilities by around 2 percent in the first quarter of this year, which is more than any other group. Middle and upper-middle class families have been taking on greater debt for auto loans, credit cards, and other consumer credit.
Source: Wall Street Journal
During the pandemic, those making more than $99,000 were prevented from receiving any of the three stimulus checks, and those making upward of $75,000 either received reduced payments or nothing at all. Thus, pointing back to the savings problem.
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Source: Wall Street Journal
According to another Wall Street Journal report, with inflation now at its highest point in decades and wage gains trailing behind, Americans are starting to dip into their savings. In May, the personal savings rate dipped to 5.4 percent—lower than the average over the previous decade, and almost half of what it was in May 2021.
Source: Wall Street Journal
Unsurprisingly, consumer sentiments are down for everyone, but for the upper-middle class, sentiments have fallen the most since June of 2021.
Source: Wall Street Journal
The consumer sentiment reveals much, as it indicates the health of an economy as perceived by the consumers. In effect, it reveals how people feel about their financial health; and under our current economy, the middle class feels the worst. With the inflation rate continuing to rise, Americans will have to continue pulling out of their savings. For the middle and upper-middle class, this is going to hurt the most.
A society which lacks a strong middle class is a society facing revolutionary collapse. As the median disappears, all that remains are rich and poor. Further, class divisions heighten with increasing inequality—as is illustrated before the fall of the Roman Republic, the Western Roman Empire, and the Ancien Régime in the French Revolution. As Aristotle detailed in his Politics, a strong middle class reflects a strong society:
The best political community is formed by citizens of the middle class, and that those states are likely to be well-administered in which the middle class is large, and stronger if possible than both the other classes . . . for the addition of the middle class turns the scale, and prevents either of the extremes from being dominant.
The middle class in America is not just currently being squeezed, it is disappearing:
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Source: Pew Research Center
The Biden administration clearly lacks both the care and competency to fix this issue, but the problem has long been in the making. The question becomes: What are Republicans, who have long contributed to this dilemma and now claim to be the new party of working America, going to do about it?
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Sourse: theamericanconservative.com
