Monday, March 31, 2008
Attention all students: The economy sucks.
It will likely continue to suck long after the Classes of 2008 and 2009 have graduated.
It all seems fairly humorous to me, considering just four years ago the biggest money issue for college students was a possible cap on tuition costs. Pick up any issue of Newsweek or watch a 24-hour news channel, and you will learn that many daunting economic ailments such as increasing inflation, stagnant wages and rising unemployment sap graduating students for all they’re worth.
Middle-class students with parents who have modest-to-boastful incomes should be more aware of the parental nest egg. Economists suggest that Americans between 18-30 will subsidize their parents’ Medicare, Medicaid and Social Security at the largest proportions in the history of these programs. Baby boomers will pose a huge strain on government spending.
Compound this with the problem that students are taking out loans at record highs. According to The College Board, private loan recipients rose 30 percent from 2004 to 2005. Banks push loans with interest rates that would make Capital One blush, and they claim these loans are convenient and necessary.
The American dollar is worth less and less every year. The Canadian dollar outpaces America by approximately one cent now. And don't even think about traveling to the United Kingdom unless your surname is Trump.
Lou Dobbs may be on to something when he says there is a war on the middle-class, and special interests are the main perpetuators. Some conservatives in Congress, who eagerly lob the socialist moniker for their respective economic plans, seem to have no qualms with stabilizing or rescuing flailing banks and other poisoned Wall Street entities with taxpayer money (Bear Stearns, Bank of America, anyone?).
But in all fairness, neither of the candidate has proposed policies that come close to solving pressing economic problems. According to most analysts, these proposals wouldn’t pay for themselves and would cause today's college graduate to pay much higher taxes.
Students are somewhat aware of the pitfalls of loans that target workers with less-than-stellar credit. Unfortunately, many college students haphazardly wield credit cards like magical items and sometimes fail to make regular payments.
Even more destructive are checking account overdrafts that can encourage a preventative charge-off of that bank account, which acts as a giant beacon to future lenders, which is bad unless one does not want to get a job, a new car, etc.
Many Americans don’t know their country is in debt to countries like India and Mexico. Incessant borrowing from other countries blunts the potency of the future American dollar by deepening the national debt, which we as future laborers will have to neutralize.
Conventional wisdom says a college education is quite necessary and sometimes expensive. Couple this with the frightful apparition of a receding economy and wasteful government spending on entitlement and social programs (not to mention a duo of wars), and students have something of a lose-(maybe)-win situation.
Students cannot do anything about inflation or gas prices, but they can be careful about credit card debt and student loans.
It wouldn’t hurt politicans to be more concerned about people losing their homes than the Wall Street aficionados losing their year-end bonuses.
This topic’s urgency will settle in when that starting salary of $75,000 can barely cover monthly expenses that would have been manageable a decade ago.
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