This is actually one of the most important points and can't be stated enough.
Look at what's happening in the West now. Bankers run amok, ripping off trillions and causing widespread economic damage. Instead of being punished for their crimes (which aren't even acknowledged by those in power), they are allowed to continue. Inflation, taxation, offshoring, dubious immigration policies, and (in the USA particularly) a corrupted healthcare system resulting in enormous costs has ruined the middle class. The poor are just as fucked as ever and the only government response to that is to build more prisons for the crimes that are the result of poverty.
How do the people react? Take a look around. More and more people are resorting to get-rich-quick schemes and outright scams. Frivolous litigation in attempt to score a big windfall so they'll never have to work again.
Nobody wants to put in a hard day's work any more because they're realized that it's a sucker's game. Like a parent, government must lead by example. And the example they are setting is a dire one.