Middle Class Gone

With the increase in Interest Rates on every loans, the only ones effected are middle class people. It seems like slowly the middle class will die.

The rich can afford to buy as many houses as they want

The poor dont want any

The middle class however are the ones who depend on home loans.

But with rising interest rates one day they will not be able to afford to pay.

Do you think the middle class will cease to exist?

And that there will be only 2 classes, one the MASTER class (the rich) and two, the SLAVE class (the poor) or is how government wants it?

It is impossible for middle class of any country to disappear. As the standard rises we will have new set of middle class or medium income group. We can say the standard of middle class have grown up as rich have become richer now. The income bar is raised but the social status remains the same.

Originally posted by: velun

With the increase in Interest Rates on every loans, the only ones effected are middle class people. It seems like slowly the middle class will die.

The rich can afford to buy as many houses as they want

The poor dont want any

The middle class however are the ones who depend on home loans.

But with rising interest rates one day they will not be able to afford to pay.

Do you think the middle class will cease to exist?

Middle class is definitely not gone neither is it going to disappear any time soon. What you are confusing it with is the class movement. The standard of living has gone up and with it has changed the idea of what the middle class is supposed to have in their life. Middle class also has three levels, higher, standard and lower and the SOL varies widely within this range and I think you are judging the higher middle SOL as that of the High class. As long as you have govt. jobs and junior, middle and even senior level executives you'll be having middle class in the society.

As for the home loan rates, if you think this is high check out the rates of before 2000. And don't worry if the loan rates increase significantly (which at this moment will not) so will your FD rate.

Originally posted by: sowmyaa

One of the problems or at least my observation is that there aren't any government or semi govt. jobs like in Banking or public sector easily available anymore. Those (sit back and relax types of) jobs back in 60s and 70s created a massive working middle class, where salary was average but still directly tied to inflation.

Govt. or Semi-govt. jobs still exist, only difference is earlier it made up the majority of the job market, now with the liberalisation it is steadily losing its share in the pie chart.