Jay Evensen
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Is a recession coming, and will it swallow millennials?

9/12/2016

1 Comment

 
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A recession may be as difficult to accurately predict as the World Series champion in September, but some ominous signs have appeared.

Chief among these is a new Wallet Hub report that shows a disturbing increase in credit card debt nationwide. Americans are whipping out their cards in record fashion, and because so few of them are defaulting on their debt (only 3.13 percent of borrowers), bankers are eager to extend as much easy credit as possible.

The debt footprint, if you will, is eerily similar to that of 2007, right before the Great Recession began. In the second quarter of 2016, Americans piled on a combined $34.4 billion in new credit card debt, Wallet Hub reports. In the second quarter of 2007, the total was $31.1 billion. 

Total credit card debt today is $912 billion. In 2007 it was $898 billion. Researchers predict the total 
will exceed $1 trillion later this year, which would “push the average amount owed by indebted households to a perilous $8,500.”

I know, dire predictions have been a regular staple of social media and the Internet since the last recession began. They amount to little more than click bait. But the good times, as anemic as they are, won’t last forever. That’s one truism you can take to the bank.

Nearly eight years have passed since the end of the Great Recession. When the next contraction comes, those holding a lot of unsecured debt could be hurt badly.
A lot of them are millennials.

A recent 24/7 Wall Street blog by Ted Beck, president and CEO of the National Endowment for Financial Education, said, “millennials are swimming in debt.” Student loans are a main culprit, but Beck pointed to studies that show 73 percent of young people do risky things, such as max out their cards or borrow from payday lenders.

He referenced another study that found 36 percent of them couldn’t raise $2,000 in a month for a financial crisis if they had to, and 20 percent have borrowed against retirement funds or made withdrawals over the last 12 months.
Beck urged the presidential candidates to begin talking about financial education. It may be too late for that.

If 2008 didn’t teach adults some pretty tough lessons about how to avoid debt, it’s hard to believe any amount of lecturing will help. It’s up to the adults to pass lessons on to their children, and apparently a lot of them didn’t do this with millennials.
​
Meanwhile, we can only speculate as to what Washington would do during another serious economic downturn, given the political fallout from the bailouts of ’08-09 and the current mood against banks and the wealthy. 
1 Comment
Nina Johnston
8/11/2018 02:05:19 pm

In response to Mr. Evensen's article in the Deseret News August 8 regarding tax incentives for businesses, as a very concerned taxpayer, why are we offering any incentive?. With the overcrowded freeways, challenging housing market for first time buyers, overcrowded schools, I want to know why we are wanting more big business here and willing to pay a tax saving incentive. We have plenty of people in Utah, the companies coming in bring their high paid executives and want to hire low cost employees for $12.00 an hour. We will soon have more homeless and Medicaid people who can't afford to live independently. Big companies should pay a premium to get to move to Utah. ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;and want to hier low, minimum pay people who won't be able to afford

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    The author

    Jay Evensen is the Senior Editorial Columnist of the Deseret News. He has nearly 40 years experience as a reporter, editor and editorial writer in Oklahoma, New York City, Las Vegas and Salt Lake City. He also has been an adjunct journalism professor at Brigham Young and Weber State universities.

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