Millennials are the most deeply indebted generation that has ever walked the face of the earth. Most don’t even own a home, yet they suffer under the weight of $1 trillion debt load.
According to an op-ed by Market Watch, this is not a good thing and doesn’t bode well for the millennial generation or the overall economy. The debt will be a problem, and millennials will pay so much for student loans that consumption and investment will be crowded out. While the $1 trillion number is large and not unnoticeable, the issue is what makes up all of this millennial debt. It’s mostly student loans, and a staggeringly high amount of these loans are in delinquency.
Society has done the millennial generation a great disservice by insisting they go into debt tens or even hundreds of thousands of dollars to get jobs that can be done with no college degree. The op-ed published in Market Watch states:
On a societal level, imagine what happens if the economy takes a wrong turn and these student loans — which are already 10% delinquent — go to 40% delinquent?
Not to get all “Book of Revelation” on you, but debt has historically led to war and inflation and autocracy.
If you are in debt, in most cases it’s your fault. But in the case of millennials, they made decisions to take out student loans when they were too young to make these decisions. What’s so sad and telling is that parents of these debt riddled millennials have never taught their kids about money and never suggested working and saving as a means to pay for a college education. They’ve never said they should not buy for something they cannot afford pay for. Yet so many take out a loan before they have even earned a dollar of income. And the parents, in many cases, have set a poor example by being in so much credit card debt and taking out massive car loans.
It has become the American way, to buy things and hope you can afford the payment. And student loan debt, because it’s so easy to get, has crowded out other kinds of debt. It’s also “government debt” and not going be wiped away when filing for bankruptcy. Student loans will follow you around until they are paid off – in full. And that’s something that should also be looked into. The problem is millennials have been promised easy money, and it is easier than working for that money.
Even if a recession doesn’t happen, the absolute best-case scenario is that people will just limp along with the crushing weight debt, crowding out consumption and investment. People live in poverty, retire in poverty, and die in poverty. And it can be attributed to the massive amounts of debt they’ve taken on.
There’s a difference between poor and broke. It would be nice if millennials now taught their children the power of debt, and how it can enslave a person. Hopefully, the next generation won’t make as many mistakes.