This article talked about one of the most terrifying economic
indicators in America, which is that the Census Bureau stating that an
increasing number of 18-34-year-old individuals are living in in their parent’s
house along with their spouse(s).
It should also be noted that these millennial have a
large accumulated student loan debt. The article states the US student loan
debt to be $1.4 trillion today. This large accumulation of student debt can
affect the economy in many ways. More specifically, student loan debt decreases
spending because student loan borrowers choose to spend less as they can not afford
to spend on items they would otherwise generally feel ready to purchase. Even
during the holiday season when spending and consumption reaches its optimal
level, those individuals who have accumulated student debt are less likely to
spend even during this season.
Accumulation of student also negatively affects entrepreneurship.
This in turn effects the growth of an economy. Many individuals who are victims
to a high student loan debt, are unable to start their own business which in
turn prevents innovation and affects economic growth negatively. Those
individuals who want to start a business with a high student loan debt are
unlikely to get approval to start it.
The article also mentions how “swallowing massive debt
obligations still isn’t enough of a deterrent to the market. “The result is we
have millions of young Americans straddled with such massive student loan debt
that paying the rent or the mortgage is impossible for too many of them.” The
article also mentions how even the housing market and rent has become higher.
Link: http://www.cnbc.com/2017/04/20/scariest-economic-indicator-more-millennials-living-home-commentary.html
Link: http://www.cnbc.com/2017/04/20/scariest-economic-indicator-more-millennials-living-home-commentary.html
5 comments:
I wonder what would be an idea solution to this problem. Obviously, subsidizing the cost of tuition for students or lowering tuition would be idea, but whats the specifically would give the highest total welfare? I wonder if these high costs will eventually lead to new incoming students being older when they begin higher education. Maybe more will get a job and save money prior to attending a university. However, it sounds like so far that when it comes to making decisions about loans for school people may often not weigh the burden of debt as much as they should for their decision.
With our rapidly unpredictable and highly competitive job market, higher education has become a necessity. The rising costs of tuition, living and the increase in student debt does not help. Many millennials have no other option but to live at home to alleviate some of their financial stress. Its absolutely ridiculous that no state in the United States offers a minimum living wage that people can actually survive on unless they work 40+ hours a week or have multiple jobs. Our lawmakers and the government remain oblivious to this fact and choose to remain in their optimistic bubble. Economic mobility is becoming less and less possible with student debt on the rise. Rent and cost of living is rising but your minimum wage is not. So maybe President Trump should put his idiotic idea of building a wall on the back burner and maybe give more thought before dropping a bomb worth billions of dollars and spend that money to alleviate the stress of student debt so millennials don't have to spend their adulthood under their parents roof.
Yeah I agree. The investment in education would be much more beneficial to long-term prosperity of the USA. Many of Trump's polices are so short sighted, so even if there is potential to boost the economy in the short run, it will actually be worse off for everybody in the long run.
It is time to stop swaddling millennials. This is not the only generation to have faced recessions and tough job prospects. Sure, college debt can be burdensome but there are alternatives to taking out massive amounts of debt. It is not the job of the government to make life easier for millennials. Its up to them to grow up and face the challenges of being an adult.
I agree with what both of you are saying, however, I think that the millennials problem is not a current one and has been present even before the current government took place. I think that the millennials also need to put in the effort to develop their human capital to affect the economy positively. I agree that Trump's policies are not helping the situation but it is not the primary reason millennials are still living in their parents house. I agree with Caroline in that they need to "grow up and face the challenges" of adulthood.
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