Generation of Borrowers Leaves Debt as Millennial and Gen Z Inheritance
Ever since the Fed cut interest rates to almost nothing, loans have become more affordable. Many citizens will have to take out loans in order to pay bills due to states, cities, counties issuing stay-at-home orders — leaving many Americans unemployed. Consumers are also taking advantage of this opportunity by purchasing new cars with very attractive APR financing, payment extensions, and deferred first payments.
The interest rate cuts and a recently passed bill will also help small to medium size businesses stay afloat until the pandemic peaks and people are able to receive treatment. Many have sent workers home according to CDC and government guidelines, but they will have to keep payroll for the employees that are essential for business.
Borrowing has been the norm during good times. It is vital during bad times. Both businesses and citizens will need to take out loans to make ends meet. Unfortunately, this will add to our rising debt as a country.
A second relief/stimulus bill is in the works and will become law once it satisfies both parties. This second bill will further increase the amount of money already being printed. This continued spending will increase inflation as well as increase our national deficit.
The rise of Bernie Sanders should have woken Congress up to the fact that the next generation wants out of debt. The millennial generation and generation z will inherit America — with all it’s bad debts. That’s why they were going to vote for Senator Sanders and why college students supported Elizabeth Warren. Because of the promise of no debt.
This is also partly why they vote Democrat. For example, another Democratic bill was introduced in the Senate that aimed to provide debt relief for students. Debt forgiveness is very appealing to young Americans. The main issue with the government forgiving student loan debts, however, is that someone has to pay for it, which usually falls on tax payers.
Both parties are in favor of greater spending. This is politics anyway. Cutting spending and increasing taxes to reduce the national deficit is not a popular platform — and would not win many constituents. The main point of popular campaigns is the government providing something with no cost to taxpayers.
Though the economic stimulus packages will help both businesses and consumers alike, the long term affect will be increased debt and devalued savings. This happened when the Obama Administration passed the American Recovery and Reinvestment Act (ARRA) during the 2008–2009 recession.