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. 

Nearly Half of Millennials and Gen Z Struggling to Make Ends Meet in the Biden Economy

 A new survey of the financial condition of Americans shows that nearly one in two Millennials and Gen Zers report that they regularly run out of money.  And this is before the likely recession in 2023.

Janet Yellen might not see signs that Americans are hurting but a new survey of personal financial conditions tells a different story. 

Prudential Financial’s most recent Pulse Survey found that 49 percent of Millennials and 40 percent of Gen Zers report that they regularly run out of money and have to rely on credit cards or parents for financial support. 

The survey also found that 46 percent of Gen Z and 42 percent of Millennials say that they would not be able to support their current lifestyle without parental support.

Financial difficulties are a major source of stress for young Americans. Half of the Millennials surveyed reported that they had trouble sleeping during the past year because of financial stress. 

The financial difficulties facing the Millennial generation are particularly concerning because most Millennials should be well into their careers at this point.

The Millennial generation is typically defined to include those born in 1981 through 1996.  The youngest Millennials are 26 and the oldest 43. 

That so many young Americans are struggling financially underscores the weakness of the Biden economy.

And this is before the much-anticipated recession of 2023.

63 percent of U.S. College Students Feel Intimidated Sharing Opinions in Class

The College Fix reports on the results of the annual William F. Buckley Institute's survey of college students.

The story from the College Fix is available here.

Also from the survey, slightly more students would prefer to live under socialism than capitalism.  

Here is the link to the full survey results.

Newsweek: Number of U.S. NEETs grows due to COVID

 

Newsweek magazine reports that the number of young Americans employed or in education has increased massively since the state of the COVID pandemic. 

For one, the idea that they're all rejecting college because entry-level jobs pay much more than they used to turns out to be something of a myth: Bogged down perhaps by a pandemic malaise, as many as one in six young adults ages 18 to 24 are neither in school nor working, according to an analysis for Newsweek by Lightcast, a data-driven labor market consulting firm. In other words, they're doing...nothing.

Disconnected from the mainstream economy, these young adults risk staying unemployed and under-educated, struggling to catch up with their peers. "People who are not working nor in school are potentially missing out on some really formative skill building years," says Lightcast senior economist Layla O'Kane. Studies suggest these young people may face lifelong consequences, including lower wages throughout their careers, higher risk of unemployment and greater odds of poor health. 

Likely fearmongering over COVID had a big part in it.  Young people were told over and over again that the world was ending and that they were super-spreaders (both untrue).  Under those circumstances, who would be motivated to start a career, train for many years for a job, or start a business.   

Look North to See How the GOP Can Attract Young People

 

America’s Republican Party has a big problem.  Republicans do well with older voters.  But Republican politicians go over like a lead balloon with voters under the age of 40. 

Exit polls show that by a two-to-one margin, young people preferred Joe Biden to Donald Trump in the 2020 election.  Democrats captured the support of younger voters by similarly large margins in every election since 2004. 

Because individual party preferences are formed early in one’s adult life and tend to persist, the failure to attract younger voters to the Republican cause bodes ill for the future of the GOP. 

So how can Republicans attract younger voters?  Canada’s new Conservative party leader shows how its done. 

Pierre Poilievre is Canada’s new Conservative Party leader.  Poilievre is a huge hit with young people.  He’s attracting large numbers of young people to his party and to conservative positions. 

Polling shows that the Conservative Party is now the most popular choice of Canadians between the ages of 18 and 29. 

So what is Poilievre’s secret to attracting young people to the Conservative Party?

According to the Canada’s National Post, Poilievre’s popularity is doe to the fact that he’s actually addressing issues that young Canadians care about.

“Poilievre’s growing popularity among young voters is likely due to how he’s seized upon an opening by providing coherent messaging that addresses the general state of dissatisfaction and the economic anxieties that are weighing on young Canadians.  That includes continuing frustrations about the inaccessibility of home ownership, income instability and inflation.”

Poilievre offers a mix of populism and libertarianism. 

He blames deficit spending by the ruling Liberals for inflation.   Poilievre is proposing implementing a pay-as-you-go law which requires any new spending to be offset through cuts elsewhere. 

Poilievre seeks to address high housing costs by reducing restrictions on development.   

Poilievre believes that Canada needs to address climate change but wants to reduce CO2 emissions through technological solutions, not by impoverishing Canadians. 

Polievere is a moderate on most social issues.  He supports gay marriage and does not want to make changes to abortion policies in Canada.  In Canada abortions are generally not available after the twenty-third week of pregnancy. 

Poilievre is a strong supporter of free speech.  He’s an opponent of woke authoritarianism in academia, the media and government. 

He supported the right of the Canadian truckers to protest.  He also opposed the use of Canada’s Emergencies Act to crack down on COVID dissenters.   

Pierre Poilievre’s plain-spoken, solutions-oriented mix of conservatism and libertarianism might be just what the Republican party needs to attract young voters,   

Young People in France Are Looking for Political Change But Likely Won’t Get It

 

Results of the first round of the French presidential election show that most young people in France are looking for alternatives to the current political order. 

Results of polling by Ipsos of the first round of the April elections appear below.

 

In the first round, Emmanuel Macron was bested by both Marine Le Pen and Jean-Luc Mélenchon among voters under 32 and attracted less than 25 percent support among voters under 60.      

This being France, only Valérie Pécresse from Les Républicans and Éric Zemmour offered free market economic programs.  Zemmour focused on tax cuts while Pécresse planned to cut France’s bloated bureaucracy and regulatory state. 

Macron is a corporatist.  Macron wants more intervention in business with government directing capital to and providing protectionist measures to politically-favored businesses and industrial sectors. 

LePen is also a protectionist and advocates for expansion of entitlement spending by reducing the retirement age from 62 to 60.  She offers a particularly innovative approach to taxation by exempting workers below the age of 30 from the income tax.  This will allow young people to build wealth, buy homes and start families. 

Mélenchon’s economic program is straight out of Bernie sanders playbook—more spending, bigger government and more regulation of the private sector.

Polls show that Macron is ahead of Le Pen in the second round.  Poll show that Macron is favored to win.  That may be the case.  However, a macron victory will not bring about the type of political and economic change that young people in France long for.