Why young people are poor

Those poor young’uns. Run of bad luck, right?

Incomes going down. Jobs scarce. Growth at half the rate of the ’50s and ’60s or less. No more go-go in the housing market. No stock market gains – in the aggregate… in at least 12 years. Households are poorer than they were 20 years ago… except, of course, households of the old and the rich.

All that college debt (more than $1trn). And the official national debt (a little over $16trn). And the unofficial, but very real national debt, which we’ve seen calibrated by Professor Lawrence Kotlikoff at $222trn and by Professor Niall Ferguson at $238trn.

Yes, it is too bad, but some people just are unlucky. Black cats cross their paths. They break mirrors. Every day is Friday the 13th for them. Guess America’s young people are like that.

Yes, young people have gotten a bad hand. But wait. Is it just bad luck or dirty dealing? Is this the luck of the draw or the old false shuffle?

Where did all this student debt come from? Wasn’t it a good thing that the feds were willing to take money from parents and lend it back to their children? Or was it just another zombie flim-flam?

First, the feds realised that people who go to school don’t show up on the unemployment rolls – until they get out. So they wanted to keep people in school as long as possible.

And it wasn’t as if the young people got to keep the student loan money. They had to pass it on – to older people in the education industry. And then, after enduring years of brain-numbing schooling, they have to pay the money back… again, to older people.

And how are they going to do that? An article we mentioned recently focused on law school grads who couldn’t get work. How about all the sociology majors? What about the history majors, the literature majors, the politics majors and all the other university graduates who are completely unprepared for the real world of work? Not only are they unprepared, the longer they stay in school the less able they are to work in the real economy. Because the more ‘educated’ they are – with the ideas, information and habits of the school world – the less well adapted they are to the real world.

What can they do? Go to work for the government!

Exactly.

People with a lot of schooling usually come to believe that schooling – rather than actually being able to do something – should determine what rank people hold in society. A person with a master’s degree, for example, believes that he deserves a higher station in life than one with no degree at all.

Ultimately, this way of looking at things – favouring credentials over performance – tips the whole society towards zombiedom. Zombies (and the feds) never really produce anything of value. So, they can’t get their status (to say nothing of their income) based on what they actually do and what other people think it is worth. They prefer substitutes. Degrees! Certificates! Licences!

People in the government earn more and work less than people in the private enterprise economy. When this is brought to the attention of the government workers they reply, “but we’re better educated!”

We’re beginning to explore the whole education scam… stay tuned…

In the meantime, let’s look at dirty dealing in healthcare. Our parents had no ‘healthcare’ to speak of. When we were ill, they took us to the doctor and paid the bill. There were a lot of very poor people where we grew up. Our local doctor never turned any of them away. She (one of the first women doctors in the country) did what she could with what she had to work with.

Then, ‘healthcare’ costs rose. Doctors began to get sued. Old people wanted more treatments and more pills. People became more aware of the many things that could go wrong. Discomforts that would have been stoically accepted as “part of growing old” needed attention. New tests and devices were put into service.

The cost of family health insurance is now about $15,000 a year. Overall, spending per person on ‘health’ has reached over $7,000 annually.

Who does the spending? Old people. Who pays the costs?

Well, there’s the dirty dealing. Instead of allowing people to spend as much of their own money as they want (which would put the burden of health care on those who needed or wanted it), the feds set up a system that basically takes money from younger people and redistributes it (in the form or almost unlimited consumption of ‘healthcare’) to older people.

Only one in ten dollars spent on healthcare comes directly out of the pocket of the person doing the spending. The other nine come from others… usually younger others.

More to come…

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  • Willem de Leeuw

    Come off it Bill, not all graduates work for the government. I know I never have. Your Wikipedia entry says you attended law school, so I don’t know where you get off telling other people that they shouldn’t go to grad school. Life is about educated guesses. One of them is about the value of getting an education. I’m sure you’d like any surgeon operating on you to be well qualified, no?

  • Edward Harkins

    ‘… all end up working for the Government’ . Well it could be worse; in other times they might have all ended up working for the financial services industries (to the huge cost of the rest of us).

    “They had to pass it on – to older people in the education industry. And then … they have to pay the money back… again, to older people.” … Honestly, you just can’t trust older people these days.

  • Critic Al Rick

    I don’t see the plight of the younger ones in the West to be attributable to the Baby Boomer Generation per se; I see it as attributable to globalisation, in particular to the greed of those who are driving globalisation.

    Anyone, other than those driving globalisation or cronies of those drivers, who has benefitted from the effects of globalisation have been/are being transient incidental beneficiaries.

    I suspect that in the longer term the only beneficiaries of globalisation will be the drivers and their cronies. That is until the backlash.

  • Boris MacDonut

    What occurs to me is why does MW continue to publish this tripe?
    To suggest that someone who has studied literature, history ,politics or sociology are completely unprepared for the rel world is ridiculous. Bill is ranting, offensive and making little sense,I fear it is time for a parting of the ways.
    Does Bill disagree with elementary educatiion? After all who does the spending and who gets taught? He seems to wax lyrical about the good old days when the poor begged for help from altruistic doctors, how appalling.

  • Critic Al Rick

    Quote Boris:
    “To suggest that someone who has studied literature, history, politics or sociology are completely unprepared for the real world is ridiculous.”

    Bill means the *real* world. You are probably confusing *real* with *fantasy*; the world you are living in. I wonder how you will cope in the real world should you survive the Fantasy Crunch.

    Call me what you will; I’m not being ridiculous.

  • Ellen

    Yes Bill, I think there is little doubt the young are being betrayed by vote hungry politicians who are too cowardly to leave the market to correct itself and prop up every entitlement for older generations.

    ZIRP has helped sustain bubbles in virtually every asset class and devalued the value of cash. QE exasperates currency devaluation and currency is the only asset the young are concerned with or have any of.
    Their rent is artificially high as a direct result of this monetary policy.
    And growth is non existent because all this QE is being used to prop up banks that should be in receivership and not on growing industry to provide employment for the young.

  • Ellen

    Markedly, further education, which is mostly a cost of youth, is now being loaned to them to be repaid over their lifetime at suspiciously high rates with unfairly high interest charges. Health cost, for which over 65s account for most of, are borne by the general population regardless of how wealthy the recipients of the service is.

    Children under the age of 18 are not represented at all at government level. It would be interesting if the voting age was reduced to about 14, and parents of under 14s got extra votes to represent their children, if younger people would figure higher on governments agenda.

  • Boris MacDonut

    #7 Votes for children. Whatever next? They literally are the undeserving poor, no assets and little income they pay very few taxes. iw ould raise the voting age to 21.

  • Jack

    The young are poor, because the young always have been poor. They have not had the opportunity to accumulate wealth.

    Should the relatively wealthy extend a hand to help the deserving (whatever that term may mean) young up? It seems mean not to.

    Should the relatively wealthy arrange affairs to disadvantage the young and make achievement on their part more difficult? It seems harsh to do so.

    There is a cult of education. In the UK students have paid large sums to non-universities to get non-degrees because holding a degree has become the entry qualification to a white collar job.
    Nothing to do with ability or the requirements of the work, just a rubber stamp needed to pass the checkpoint onto the shortlist.

  • Ellen

    @ 8 Boris. Make up you mind Boris. If government want to means test education to minors using their parents income as the benchmark, then the ones with more affluent parents are completely entitled to vote by you own elitist standards.

    And do we make a classification for the ‘older undeserving poor’ – and withdraw their vote?

    My point is that minors are not represented, in any way, in the democratic system. And older people have largely been protected from tax rises and austerity cuts because they are over represented.

  • Critic Al Rick

    Ellen, you appear to attribute more electorate power to the so-called democratic vote than do I. As I see things any sway the electorate may have on political decisions is, regarding the bigger picture, merely tinkering around the edges.

    I stand by my post @3.

    So, in light of your post @6. how have ZIRP and QE helped pensioners?

    Again, I stand by my post @3. Any beneficiaries, other than the drivers of globalisation and their cronies, of overall political direction are of a transient incidental nature.

    So-called democratic elections are, in my view, effectively a choice between different sets of puppets; the ones pulling the strings being the drivers of globalisation.

  • Andrew H

    Here’s the latest statement from Boris at the Ministry of Silly Walks and Rose Tinted Spectacles:

    “Any government that claims to help poor people is not subject to the rule of law. Do not question your political masters. Everything is fine.”

    N.B. The statement is best read aloud in a dalek like voice such that none of the nuances and subtle meaning of its content are lost.

  • Andrew H

    Here’s another statement from Boris at the Ministry of “Sticking your fingers in your ears and singing la la la it’s not happening”:

    “Govenment finances are on a sustainable footing. The government are not running a ponzi scheme. The economy is fine. There was no credit bubble. Money printing is normal. We can print as much wealth as we need.”

    N.B. To re-iterate, best read aloud in the style of the Supreme Dalek.

  • Ellen

    @ 11. Al – I can acknowledge that recently retired people have been very unlucky with annuities and I think it is unfair as it is based on ZIRP – which was supposed to be a short term emergency measure to get us though a credit crunch that happened five years ago!

    However, ZIRP and QE have kept house prices artificially high, which largely suits older people who bought their houses decades ago and might be looking to downsize. They also devalue currency which should boost all other asset classes. Very few young people hold much assets and they save for deposits on houses in cash, the worst asset class.

  • Ellen

    @ Al. We have to put our faith in democracy because there is nothing else – but politics has become corrupt. Politicians have too much of a say in how its run. They carve up the electorate to ensure there are very few marginal seats and these become the only voters who matter. They spend millions on spin, effectively trying to dumb down the electorate rather then being restricted to simply presenting their policies and allowing the electorate make an informed decision. I would like to see constituencies determined randomly, maybe by alphabetical order, so that politicians would struggle to profile their voters for their own advantage. And I stand by what I said, that under 18s, like everyone else, should be entitled to expect representation at government level.

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