By: Mathew Burrows

What is the kernel of the issue?

For the first time in a half-century, the global middle class has started to shrink. Post-COVID-19, the global middle class will shrink by 120 million people.  

Why is the issue important?

Historically, the erosion of the middle class has led to periods of political instability, democratic backsliding, and greater conflict.   

What is the recommendation?

The Biden administration should lead a global effort to provide more aid to developing economies, without which more of them will default on their rising indebtedness.  This risks sparking yet another global financial crisis and slowing the post-COVID economic recovery in the United States. The Group of 20 (G20) has created a “Common Framework” (including China) to manage debt relief, but US congressional reluctance to approve any new resources for the IMF could undermine G20 efforts.    

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