Americas middle class?

[Emily]

How vital is the stability and prosperity of the middle class/working class to the economic and social structure of America?

three reasons?

[Chris]

I think 90% of americans identify themselves as middle class. So just answer the question taking out the 'middle class' part and replacing it with 'everyone'

[jc2426]

To answer the question as simply as possible, the term middle class is misleading & somewhat irrelevant. What is important to the overall stability of an economic structure is the relative relationship between the ruling minority to the working majority. Put another way, the gap in relative income between the the average working consumer & the wealthiest portion of the society.

In a relative free market environment, money is congruent to power & influence. When money is spread evenly across the populace, the market behaves in fairly predictable self-regulating patterns. When money is concentrated in small sectors of society, the imbalance of power creates the highest potential for profit in favor of those holding the most who by default, are inherently capable of investing more & at a decreased level of risk.

A large income gap may lead to an exponential widening as power becomes focused more tightly into a smaller section of society. As the gap widens, the working majority is forced to expend more of it's limited resources to remain at a level of zero growth. When this expenditure reaches its natural saturation point, a recession must occur. This serves also to redirect more wealth away from the working class as decreased demand leads to lower employment rates.

An overly exaggerated income gap will destabilize the entire economic balance & lead to negative growth. In the event that adequate regulatory measures are not applied, it will likely bankrupt the entire system devaluing currency to the point that it no longer holds any value. The system Then naturally reverts back to a form of equal balance, albeit in a violently abrupt manor.

[xpatinasia]

Very.