[codelitt]

I see your point. Though, I'm not terribly convinced about wealth inequality being a major driver in this. I know it is a hot political topic, however, I don't think it is nearly as extreme (except for the very edges of the spectrum) nor as problematic as it is being portrayed. I read this paper recently that I thought was an interesting perspective: https://cei.org/sites/default/files/Ryan%20Young%20and%20Iai...

[exelius]

On a global level, you may be right -- but recessions and market forces strike nationally, and it's hard to tell an out-of-work coal miner that "Sorry, there are no factory jobs to fall back on because we gave them to some really poor people in Honduras and now they're doing great!"

A middle class that is relatively less wealthy than the upper class has less ability to soak up down markets. And down markets will always happen (I mean, it's cyclical) -- but the middle class in the US is leveraged up to its eyeballs just from trying to get to a middle-class lifestyle (college loans, medical bills, etc.) That means the slightest perturbation in the status quo sets off a chain reaction of default and money supply pinch.

I expect the next recession will trigger the student loan avalanche. There are students graduating with over $100k in debt -- and many like me who are well into lucrative careers without a ton in savings because so much of their income goes to servicing their student loans.