I think what we see there is that humans learn a lot from social cues from their parents, relatives, and peers. For many cases this is an advantage because you

I think what we see there is that humans learn a lot from social cues from their parents, relatives, and peers. For many cases this is an advantage because you don't have to explicitly break down a topic for teaching and learning - there's probably a 1000x times when this implicit learning ends up better for the group than not. But when the middle class is shrinking, then there are a lot of built up tribal approaches for handling finances which are diverging from stable choices in reality then that copying breaks down - especially if you're in a cultural group where it's taboo to some degree or other to discuss finances. e.g. You have to go to college - modern explicit caveat: studying a major that has a chance of paying back the college debt. It's a good to buy a single family house - modern explicit caveat: only if you have sufficient income stability and down payment saved - before a house was a small enough portion of middle class income that it could generally work out well in a wider range of cases. Keep up with your peers spending on social cues: vacations, new cars, etc - keeps you networked into a social group for work/business opportunities (but if the group as a whole can't sustain some lifestyle... then this becomes a negative...) etc... I don't think this is the sole problem, but I think it's a big social driver of it.