In today’s world, it often feels like no matter how hard you work—no matter how many hours you put in, how many sacrifices you make—you’re always falling behind. The bills keep rising, the dream of homeownership seems more elusive, and savings never seem to stretch far enough. If you’ve ever wondered if it’s just you, you’re not crazy. You are, in fact, being systematically left behind. The financial system is rigged, and it’s leaving the average person, especially the middle class, stuck in a cycle of perpetual financial struggle. In Broken Money: Why Our Financial System is Failing Us and How We Can Make It Better, Lyn Alden takes a deep dive into the issues that are causing the average person to fall further and further behind, despite their hard work. The culprit? A broken financial system that disproportionately benefits the wealthy and corporations, all at the expense of the people who work the hardest.
The False Promise of Hard Work: The Cantillon Effect
At the heart of this issue lies a concept called the Cantillon Effect, which Alden explains in detail. It is the idea that when the government prints money, the first recipients of that new money are the ones closest to the money supply—large banks, corporations, and the wealthiest individuals. These entities are able to use the freshly created money to buy assets, like stocks and real estate, before inflation has had a chance to kick in. They get to purchase things at pre-inflation prices, making their investments more valuable immediately.
By the time that money trickles down to the middle class, it’s already been devalued by inflation. In other words, the money you earn today is worth less than the money you earned yesterday. This is not a consequence of your personal failure or lack of hard work; it is a systemic issue built into the very foundation of the financial system.
Alden points out how this system distorts wealth accumulation. The rich get richer not by working harder, but by having access to cheap credit and newly created money. Meanwhile, the middle class is left to watch their wages stagnate while the cost of living increases. The result is that no matter how much harder you work, your purchasing power is steadily eroded.
The Financialization of Everything
Another key point Alden makes is the financialization of nearly every aspect of the economy. Financialization is the process by which more and more sectors—housing, healthcare, education, and even food—become financial assets, driving up their prices. It’s not just that things are getting more expensive; it’s that the very institutions meant to serve us have been turned into profit-making machines that benefit the wealthy and leave the average person paying more for less.
Take housing, for example. Alden discusses how, since the 1970s, housing has shifted from a place to live into an asset class. The wealthy, backed by cheap credit and easy access to capital, have bought up property, creating an artificial scarcity that drives up prices. Meanwhile, wages have stagnated. Today, the average person can’t afford to buy a home, and if they can, they’re paying a significantly larger percentage of their income toward a mortgage than previous generations ever did.
This financialization doesn’t stop at housing. Healthcare costs have skyrocketed, and education is more expensive than ever before, often requiring people to go into significant debt just to get a degree. The idea of owning assets that appreciate in value is increasingly out of reach for the middle class, while the wealthy continue to accumulate more wealth through investments in stocks, real estate, and other assets.
Inflation and the Devaluation of Your Savings
Let’s talk about inflation, which Alden explains in no uncertain terms. Inflation isn’t just a “natural” economic phenomenon—it’s largely driven by government policies. When the government prints more money to fund its deficits or bail out large corporations, it causes the value of money to decrease. This devaluation is a hidden tax on your savings and purchasing power.
Alden highlights how, since the 2008 financial crisis, the central banks of the world have been flooding the economy with money through a process known as quantitative easing (QE). In simple terms, QE is when central banks inject money into the economy by buying government bonds and other assets. This floods the financial system with liquidity, lowering interest rates and pushing up asset prices, including stocks and real estate. But, as Alden points out, this money doesn’t go into the hands of the average person. Instead, it flows into the stock market, driving stock prices to historic heights, and benefits those who already have investments in these markets.
But here’s the kicker: While the wealthy get richer, the rest of us are left behind. Inflation erodes the value of the dollar, meaning your paycheck doesn’t go as far as it used to. Even if your wages increase, they often don’t keep up with the cost of living, which means you’re working harder for less.
The Shrinking Middle Class: The Wealth Concentration
In Broken Money, Alden discusses the growing gap between the rich and the poor, showing how wealth has become more and more concentrated at the top. The middle class, once the backbone of the American economy, is shrinking. This isn’t a coincidence; it’s the result of a financial system that is intentionally designed to favor the wealthiest individuals and corporations.
The government has consistently prioritized the needs of the wealthy through policies like tax breaks for large corporations, bailouts for financial institutions, and the protection of monopolies. Meanwhile, the middle class faces stagnating wages, rising debt, and a lack of opportunities for wealth accumulation. This isn’t just a problem in the United States—Alden points out that it’s a global issue. Countries like Argentina, Venezuela, and Lebanon have faced similar problems, where the financial system has failed to provide stability for ordinary people.
The Myth of the “American Dream”
Alden makes a powerful point: The myth of the “American Dream”—the idea that if you work hard enough, you’ll succeed—is just that: a myth. In reality, the financial system is rigged against the middle class because of broken money. As long as the financial system continues to favor the wealthy, working harder will only keep you in the same place. The dream of upward mobility is increasingly out of reach for most people, and the harder you work, the more you’re getting squeezed.
This systemic problem is why so many people today feel like they’re working harder than ever and getting nowhere. The deck is stacked against you, and it’s not your fault. It’s a result of decades of policies that have enriched the wealthy while hollowing out the middle class.
Conclusion: Broken Money – The Need for Change
The solution lies in a return to real money—commodity money, like gold or silver—backed by the market, not by government decree. Under such a system, the purchasing power of money is preserved, and the middle class would no longer be subject to the constant erosion of wealth caused by inflation. This is not a call to “stabilize” the current broken system with temporary fixes, but to dismantle it entirely and replace it with a system that serves the people, not just the elite.
Banks, too, must operate under the principles of a free market. Fractional reserve banking, where banks lend more money than they hold in reserves, creates artificial inflation and financial instability. A 100% reserve system would eliminate this risk, ensuring that money lent is actually available, preventing the systemic risk of bank runs and economic collapse. By allowing people to store wealth in a stable, tangible form, we can stop the constant cycle of money printing that devalues hard work and savings.
When money is treated as a commodity, it acts as a store of value, a medium of exchange, and a unit of measurement for goods and services. It would no longer be a tool of financial manipulation or a political weapon, but a reliable system for valuing and exchanging the goods and services we produce. In such a system, the middle class wouldn’t just survive; they would thrive. They would no longer be victims of inflation, financial crises, or a system rigged to benefit the wealthy.
The time has come for a fundamental change, one that removes the power of money creation from the hands of governments and central banks and places it back in the hands of the people. We need to shift from a system that rewards the wealthy few to one that provides stability and fairness for all. Only then can we rebuild an economy where hard work results in real, lasting wealth for everyone.
