Monday, April 14, 2014

Debt, debt and then debt


"Holy smokes! Sometimes I feel like Atlas in Atlas Shrugged!"

I was at a campaign meeting last night. We were talking about a raft of issues that voters should be concerned about this November. When the subject of our national debt came up, someone asked if young people are concerned. For a long time, many young people were tone deaf to this enormous debt we are dumping on them. One young man at the meeting answered the question this way - "Many young people are more concerned with the staggering student debt they are leaving college with." Bingo. Point well taken.

It really gets down to the difference in tactical and strategic thinking. The $17.5T is there alright, and it is not going away. In fact, nobody is doing a thing about it right now - on either side of the aisle. The debt, even though it has become part of our lexicon, is an abstraction. It is like scientists telling we will be hit by a huge meteor in 2035. We will start worrying about it in 2034.

For a young person just turning 21, with the growth in the debt expected to continue, that person's share of the national debt will be a whopping $740,000! In addition, by 2035, some economists believe the debt will be twice as large as our economy! But that is not tomorrow. That is in the future. As for today, kids just getting out of college need to worry about finding a job, paying rent, and then of course, addressing that monster of a school loan they have accrued.

How bad is the student debt these days? Not good. Despite all the rhetoric we have heard about tuition freezes, the "frozen" price of education is still sky high. In December of 2012, CNN reported that the average student debt was almost $30K. That is up about $3K from the year before. I did not get the stats for December of 2013, so lets assume it is still just over $30k. Plus if you spent four years in a private school, it could be double that, or more.

So how do we get through to young people about debt? Not easily, I am afraid. First off, many young people look at us as "ruining the soup". The table our parents set for us was much different that the table we are setting for our kids. We may think the Millennials are clueless, but trust me, they are not stupid. They know my generation has emptied out the kitty, spend all the reserves. And then when the kitty was empty, my generation decided to keep the party going. Even though my generation took math, we failed to understand that "zero" means the end. We started liking negative numbers.

So today, as I continue to ponder campaign strategy, I will also ponder how to talk to young people about debt. As a representative of my generation, should I first apologize? I probably should. Beyond an apology, I really don't know what to tell young people about our national debt and their crushing school loans.

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