WSJ: Young Americans Being Driven Deeper into Debt

 

The Wall Street Journal documents how inflation, rising home prices, and fallout from COVID are driving young Americans deeper into debt.  One wonders how long they’ll keep voting for the politicians that are impoverishing them.

The Wall Street Journal reports that debt levels and credit card delinquencies are rising more rapidly among young Americans than any other demographic group.

The article cites three factors, all of which have their basis in government policies. 

First, there is inflation, a creation of frenzied Federal Reserve money creation.  The Journal writes:

“Now, rapid inflation is forcing many to spend more on gas, groceries and rent, eating into pandemic savings. The last round of stimulus checks went out in 2021. Families are back to commuting, traveling and eating out again. The Federal Reserve’s campaign to curb inflation has pushed up interest rates on credit cards and other types of loans.”

Then there’s COVID.  The Journal points out that families had to spend a lot more on child care when schools were closed—and teachers given paid vacations—during the pandemic.  The Journal writes:

“Some changes are hurting millennials in particular. Many spent unplanned thousands of dollars on child care or tutoring when schools closed. Some relied heavily on a pandemic-era program, the government’s monthly child tax credit payment, but that has lapsed.”

And third, we have skyrocketing home prices.  The Journal writes:

“Many 30-somethings are trying to buy their first homes and have been squeezed by higher rates and home prices. The median price for an existing home was $359,000 in January, more than $90,000 higher compared with three years earlier. In recent years, prices rose the most in lower-cost neighborhoods that are more likely to be in millennials’ budget range.”

The factors that lead to home price inflation can all be traced back to government policy in some form.

 The Federal Reserve’s free money policies of the last fifteen years did nothing for home buyers.  Sure, you could get a mortgage on the cheap.  But that also meant that there was a lot of competition among buyers so sellers could get a high price. 

On balance, low rates did nothing for home buyers.  Home ownership rates for young people didn’t go up during Bernanke, Yellen and Powell’s decade and a half of monetary madness.     

Couple that with NIMBYism and zoning restrictions that make it very difficult to build new homes because that’s no land.  As Mark Twain said about land: “they ain’t making any more of it” and as long as local governments won’t allow greater density, they ain’t making more homes either.

Unfortunately, the Baby Boomers and Gen Z have proven slow to learn that government is the source of, not the antidote, to their problems.

As long as young people keep voting for more government, they’ll continue to get the shaft, and go deeper into debt to make ends meet.

Government Schools are America’s Engine of Inequality

 

The failure of government schools to provide poor kids with a basic education is a handicap that few are ever able overcome.  Rather than a social leveler, government schools are the driving force for inequality in America.

In Baltimore there are 23 elementary schools in which not a single student is proficient in math.  No one student in the entire school.  In the entire city, only seven percent—one in fourteen students—is proficient in math.

In one Baltimore school, a GPA of 0.13 places a student in the top half of the class. 

To call Baltimore schools a public school is a misnomer.  They don’t serve the public.  Instead, they serve the teachers unions, administrators with lifetime appointments, and the craven politicians who benefit from a captive voting block of government dependents. 

Here’s a story from the Baltimore Fox affiliate on the failure of government schools in that city.

  

If the Fox Project Baltimore story doesn’t make you mad, check your pulse to make sure that your heart is still beating.

The same story plays out in government schools throughout the United States. 

In Milwaukee, just 11 percent of fourth graders are proficient in math.

In California statewide, only 27 percent of eleventh graders met or exceeded statewide standards for math.   

Just 30 percent of Boston public school students—less than one in three--are proficient in math. 

The primary reason for inequality in America is not racism or the police.  It is the government school system. 

Consider what life is like for the students in these 23 Baltimore schools.  They’ve been robbed of the opportunity to have an education, to develop their minds.  And when you don’t have educational opportunity, you don’t have life opportunity either.

It’s not just that they’ve been victimized by the Baltimore school system today.  They’ll continue to be victims for the rest of their lives. 

So many important decisions in life require quantitative reasoning skills.  Managing your finances requires quantitative reasoning skills.  Weighing risk against reward requires quantitative reasoning skills.  Running a business requires quantitative reasoning skills. 

Those who can manage their finances, understand risk, and run a business get ahead in life.  Those who can’t find themselves falling victim to scammers, loan sharks and flim-flam artists throughout their lifetime.