The Collapse of the US Middle Class and Its Background The crisis currently facing the American middle class is significant. Analyses are continuously emerging, indicating that the middle class, once the central pillar of the US economy and considered a key stratum for social stability, is steadily weakening. With the economic homogeneity and stability symbolized by the 'American Dream' now faltering, there is growing attention on how these changes will impact not only the US domestically but also the global economy and politics. In particular, opposing arguments between conservatives and progressives regarding the causes and solutions for the collapse of the US middle class necessitate a more thorough examination. The crisis of the American middle class is not merely an economic issue. It is sparking widespread discussion in the international community, as it is interpreted as a result of neoliberal economic policies over the past few decades. Economist Paul Krugman, in his New York Times column 'Deepening Inequality, Neoliberalism as the Main Culprit in the Middle Class Collapse' on April 20, 2026, pointed out that neoliberalism has been a primary cause of the middle class's weakening. Krugman explained that neoliberal policies, which began in the 1970s, exacerbated income inequality by weakening labor unions, deregulating industries, and lowering taxes on high-income earners and large corporations. He specifically pointed to the concentration of wealth at the top and the stagnation of labor income, warning that the economic foundation of the middle class is fundamentally shaking. The solution proposed by Krugman is clear. He argues that the middle class must be restored through active government redistribution policies. Specifically, he proposed four key policies: raising taxes on the wealthy, increasing the minimum wage, expanding the social safety net, and strengthening workers' collective bargaining rights. These policies all reflect a progressive perspective, aiming to alleviate income inequality and restore the economic status of the middle class through government intervention rather than market autonomy. Krugman criticized neoliberal policies for promising a 'trickle-down effect' but actually accelerating the upward concentration of wealth, emphasizing that it is now time for the government to actively engage in redistribution. In contrast, the Wall Street Journal, in its April 21, 2026 editorial 'Excessive Welfare and Government Intervention Suffocate the Middle Class,' directly refutes the progressive camp's arguments. They contended that excessive government spending, regulation, and market-distorting policies hinder corporate investment and job creation, and cause inflation, thereby weakening the purchasing power of the middle class. The Wall Street Journal clearly articulates a conservative viewpoint, arguing that high taxes and welfare costs diminish economic vitality and undermine individual autonomy and responsibility. They analyze that increased welfare spending exacerbates budget deficits, which in turn acts as inflationary pressure, ultimately reducing the real income of the middle class. Progressives and Conservatives: Conflicting Solutions The solutions proposed by the Wall Street Journal are also diametrically opposed to Krugman's arguments. They emphasize that achieving economic growth and expanding opportunities through tax cuts, deregulation, and the restoration of free market principles is the fundamental solution for the middle class's revival. This conservative prescription is based on the logic that the government's role should be minimized and market autonomy maximized to create an environment where businesses can invest more and create jobs. The Wall Street Journal argues that excessive welfare actually discourages work ethic, and high taxes weaken corporate competitiveness, ultimately reducing employment opportunities for the middle class. Thus, the progressive and conservative camps in the US show stark differences in their fundamental economic philosophies, from diagnosing the causes of the middle-class crisis to proposing solutions. While the progressive camp emphasizes market failures and advocates for active government intervention and redistribution, the conservative camp points to government failures and stresses market autonomy and individual responsibility. This debate goes beyond mere policy preferences, raising a fundamental question about how to define the roles of government and the market within a capitalist economic system. The essence of the US middle-class crisis does not stem solely from short-term economic policy failures. Changes in economic structure, globalization, and technological innovation are also significant contributing factors. Technological advancements, centered on automation and artificial intelligence (AI), replacing traditional manufacturing jobs and failing to create enough new high-income jobs, is also a problem. Furthermore, changes in
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