Posted on 05/21/2024 1:44:36 PM PDT by Heartlander
Years after the fact, the mainstream media is discovering that Gen Z is doomed. As CNN puts it, Gen Z is “earning less, has more debt, and higher delinquency rates than Millennials did at their age.”
In short, the pandemic did a number on Gen Z, followed by a wallop from Bidenflation, lagging wages, and now a looming recession.
How are they surviving? Debt.
A new study from Transunion finds that, since 2013, average debt balances for those aged 22 to 24 has risen by 40%, including a 14% rise in auto loans and a 26% rise in credit card debt.
For those with a mortgage — which is a vanishingly low percent of Gen Z — the average mortgage debt is up by nearly half to $215,000 — quite a bit of debt at 24.
That, of course, is thanks to the Fed’s money printing that drives house prices to an arm plus a leg.
This debt has mirrored the savings rate, which plunged during Covid from an already abysmal 6% pre-pandemic to just 3.2%. So Americans are saving 3.2 cents on the dollar earned. For perspective, in the early 90’s it was three times that.
The pandemic apparently accelerated debt, and most dramatically among the young; Gen Z opened new credit cards at a faster rate than even Millennials during the pandemic — during 2020, there were multiple months when almost 6% of Gen Z’ers had opened at least one new credit card in the previous month.
Note Gen Z has the lowest income — therefore the lowest debt capacity — of any generation. Yet here they are sporting multiple cards and giving them a good workout.
All this debt, of course, is now driving delinquincy rates, with auto loan delinquencies rising by half, and credit card delinquencies doubling since 2022 to over 6% of credit cards in delinquency — not just carrying balances, but in actual delinquency.
Keep in mind that this is all just the debt we can see — buy-now-pay-later has edged out avocado toast for Gen Z’s favorite daytime activity, totaling an estimated $700 billion in shadow debt.
In a recent Harris Poll, one out of three respondents said they’ve spent more than $1,000 on buy-now-pay-later, and 54% of users admitted spending more than they can afford.
One in four reported that buy-now-pay-later is making them fall behind on other lines of credit — note a credit card charges 24% interest per year, which is slightly lower than the mafia.
In a recent video, I mentioned the real-world fallout from all this debt, with declining sales for low-end staples from McDonald’s to Coke to Kraft Mac-n-Cheese — a Gen Z standby. Now Walmart is rolling out a private label brand of items under $5 to clothe our next generation in all the finery their debt will allow.
Gen Z is a financial train wreck — keep in mind this is the next generation of Americans.
They’re facing soaring prices and plunging wages, even as their formative experience of stimulus checks and student loan bailouts has taught them that maybe if they crash hard enough, Mom and Dad — er, the federal government — will bail them out.
We’re raising a generation of wards of the state, sustained not by productive work but by debt and handouts.
Given that government spending is unsustainable at 7% of GDP, they’ll eventually hit reality.
And they’ll be completely unprepared for it.
They are eating and drinking all their money away and say that is the only way to have a "life". Let's not even get into the amount they spend on recreational pharmaceuticals.
The other half do get it and are learning life skills like how to cook, how to fix stuff and how to save.
I do have hope for them.
Not a surprise. They’ve never bothered to educate themselves. “Snow days” are more important.
Not only did I have a mortgage at 27, I had just been honorably discharged from my 6 year military obligation, thus fulfilling a duty of citizenship.
The White birthrate. Not going to stop any other group.
People including myself were expecting a glut of used cars on the market once the Covid payments stopped and that didn't happen.
I’m so old I consider $200 a month to be a reasonable car payment.
I have a buddy that runs a dealership. He laughs at me. The low $400’s a month will get you a POS. A decent vehicle will be closer to $600 a month.
I wanted a new pick up truck. IF I was willing to go 6 years of payments I could get a basic model for about $700 a month.
That’s nuts.
I’m old...
But they still vote democrat.
I want them to feel pain. Lots of it, until the Rat Party is exterminated. /spit
we the people must give him the ability to fix this...
and make it known we won’t put up with any more malarkey.
They are not going to pay.
...in addition to their own bills...
They are not going to pay those bills either.
The process of sorting out the claims will be most - untidy. Whoever survives will get whatever is left. That will have very little to do with laws or lawyers or courts.
I’m talking about boomers who didn’t work hard (there are a lot of them) and think all their needs should be provided for on the backs of taxpayers....who have helped run up the debt to where it will take generations to follow to pay that money back.
They think they are in paradise.
That is true...I should have included that caveat.
“Just wait until Gen Z figures out they have to pay all the bills the boomers are running up right now...in addition to their own bills..”
Gen Y/Z already hates the boomers with the burning passion of a 1000 suns.
Just go to reddit and type in boomers... the seething hatred is palpable. America has been transformed, yet they blame the boomers instead of the fundamental transformers. (cough zero cough).
Boomers run the country. Boomer Marxist filth run the government. Boomers are a garbage generation.
Most Gen Zrs are good kids that will likely follow your path...but is it fair to bring them into this world already owing $100+K in debt that was spent on previous generations? Did generations yet unborn consent to being tax slaves to the dead?
I love it when you make a general statement and someone comes back with a silly pedantic comment that adds nothing to the conversation—rather points the spotlight on themselves.
Yes, you did that. Thank you for your service. You are ahead of the curve.
My father is in his mid-eighties and it turns my stomach to hear him actually say "well, I won't be around to have to deal with that."
That's not how he brought us up. I can't imagine leaving my kids (and hopefully grandkids) with my debt so I could live off the fat of the land.
Truly shameful.
yet too many older people voted for selfish reasons...too many were and are just stupid and too many are stuck on the rat plantation...
govt workers and their retirees really do not care about the rest of the country...
fact...nobody cares about anyone else for the most part.
Starting 1981, the debt started snowballing and has t stopped. Both parties contributed to the mess.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.