WE SCREWED THE FUTURE WITH DEBT
We’re selling our tomorrows for a one night stand. We’re buying things that we don’t deserve nor do we really want. We’re buying things because society and media says we need them. In a quest to obtain this ideal lifestyle, we are forced to obtain the tools to earn enough money so we can publicize this on social media. We are told to go to school and find a good job. Live that ideal life. As a result, we are accumulating a lot of debt to achieve this. Student loan debt has hit a new high. Auto debt has hit a new high. Mortgage debt has hit a new high.
Debt is not entirely negative but it is negative when it forces people to work to service debt, leaving us to have just enough to survive. This is financial slavery where debt forces us to work or face possibility of homelessness and bankruptcy. This doesn’t include the emotional and mental tolls of debt in our lives and relationships. Students are left with no alternative other than seek expensive college educations to compete in the modern world. The problem is that with the relatively fixed supply of schools but a larger increase in college demand, tuition has gone up dramatically. Students face no other option than piling on students loans to pay for the opportunity to participate in the labor force. Not only do they have to face the increasing cost but also the increased in student enrollment have caused many students to take a longer time to finish thus even higher cost and debt. Students also face higher housing cost which displaces income from paying for education to pay for basic living expenses. At times, students are forced to get into credit card debt for living expenses and student loan debts for school expenses. Or even student loan debts for both.
Upon graduation, students are faced with high debt obligations with weak wage growth because the increasing numbers in an educated work force on pushes wages downward for those jobs that may not exist when automation and artificial intelligence uproots the face of modern labor. This downward pressure makes student loan and credit card debt an even heavier burden that reduces disposable income. If students don’t graduate, they are faced with not just lower job prospects but the pressure of student loan debt. A huge problem is that most students do not weight the cost and benefits of a traditional education system that seems to focus on quantity versus quality degrees. We allow students to get into tens of thousands of school debt but not credit card debt. Credit card debt has a limit and feedback in terms of immediate payments but students don’t face these limitation or the feedback until the damage is done.
The low disposable income forces younger generations into becoming a renter society since they cannot save enough money to buy a home with their increasing student and credit debt. Because of this, the lower demand from owners allows investors and banks to dominate housing. With the increase in renters, so goes the demand for rental housing thus pushing the rental prices up; thus putting more pressure on people who are already struggling with debt obligations and housing cost. This forces workers to work more and more; less likely to take risk. We never take the risk to build the businesses and make the investments that will bring them out of their debt. They will perpetually be imprisoned in the workforce. They will only be a disability, layoff or financial emergency away from financial ruin or homelessness.
Another problem with this debt is that without the ability to save and buy assets such as real estate, most of these workers will never build the wealth which will free workers from economic slavery of working for their money. Generationally, this puts not just the worker at a disadvantage but also their children and future generations as well. They will struggle to provide for their children with less disposable income; leaving their children without the financial wealth to build a brighter future. A generational tax on not just our current young people but the future.