this post was submitted on 10 Jul 2024
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Most Millennials have been through two market crashes and many are burdened with significant student loans
That's true for most generations, with the exception perhaps of student loans since there was a big change in 1992. Here are some examples of market corrections/recessions for each generation:
And so on. Historically, there's a significant market correction every 8-ish years, on average. Most people will experience 3-4 of them during their peak earning ears, as well as one just before or just after retiring. The 2008 -> 2020 bull run was way longer than usual, and the market corrections weren't as severe or as long as in the past, so theoretically millennials should be better off than their predecessors, assuming they invest a consistent portion of their income (big doubt).
But at least on paper, millennials are no worse off than any other generation. Student loans certainly add some complexity, but I think that balances out with historically low interest rates, with current rates being a little below the median (as in, our current "high" rates are pretty average).
So what we're seeing is recency bias in how we remember how the media portrays things. Crises sell, so we're going to see a lot more negative press than positive press, and we're going to only remember the press that's relevant to us (i.e. things from the past 5-10 years).
Bro unironically just handwaved away one of the largest bubbles holding back the American economy and then said Millenials aren’t worse off if you just ignore it
Do you even know what a SLAB is 💀
I'm not hand-waving the student loan issue away, I'm merely saying it's not as impactful as the media makes it out to be. I'm a massive opponent of the 1992 bill that made student loans much easier to get because we ended up with a bunch of kids taking on debt who don't know what they want to do with their lives, much less understand the long-term consequences of debt.
However, pointing at student loans in isolation to show that millennials are screwed isn't reasonable, we need to look at the big picture. Look at home-ownership rates (biased source, but they had a good graphic; there are plenty of others) as an indicator. Millennials lagged previous generations for a bit (perhaps due to student loans?), but they've caught up and it's possible they'll surpass previous generations. They're buying houses a bit later, but they're still buying houses in similar numbers. To me, home ownership is a strong indicator of a healthy economy, because you can't buy a house if you're unable to scrap together cash for a down-payment and meet the monthly payments.
So while the student loan crisis is bad, it's not completely ruining the millennial generation, it just seems to be a unique detail, and each generation has those. We should obviously do something to fix it, and my proposal is to allow them to be discharged in bankruptcy and phase out government loans and go back to using grants instead. I think that has the best chance of being a "soft landing" since only those who are completely screwed over by it will choose bankruptcy, and those who value their credit will just pay them.