Echo-boomers may be the key to economic recoveryJoe Wirbick
I believe our country has been embroiled in an economic slump for close to five years, and for much of it our government has been spending trillions of dollars on its recovery effort.
Markets have experienced both highs and lows over this period, as has the unemployment rate. However, are we truly recovering? Are we better off as individuals today than we were at the end of 2007?
I believe for us to return to the economic expansion we saw in the early 2000s, the country needs to be spending at the same levels we were back then.
Notice I didn't say that the government needs to be spending at the same levels, nor did I mention the Fed.
In my opinion, true recovery will occur when individuals and businesses spend and lend in increasing amounts. This may start to happen when people feel comfortable not only with their savings accounts but also with their future income streams.
I believe people will need to feel secure that the housing market will remain stable (remember when home owners could virtually count on their property values increasing year after year?). But more importantly, people may need a reason to have something on which to spend their money.
And that may be a big problem.
I believe our country is an aging one. As our citizens grow older, their needs change. And as a demographic, older generations tend to shift into a “savings” mode instead of a “spending” one.
The counter balance to one generation decreasing its spending hopefully comes when another enters its age of spending. The theoretical light at the end of this tunnel – Echo Boomers – total nearly 72 million Americans born between 1982 and 1994. These fresh young faces are probably entering college as we speak and hopefully will soon become a driving force in the domestic economy.
Unfortunately, the trillion dollars of college debt our citizens are already carrying continues to increase (just this past year college costs have risen 8 percent). The staggering scholastic debt this generation faces upon graduation may limit its spending potential and decrease its ability to truly have a positive impact on future growth of the economy.
I believe that all the government spending in the world will not fix our current problems. I believe the next generation holds the key to recovery. It may be rough for awhile, and the next generation’s ability to help return our country to a prosperous one will be challenged if its members enter adulthood with a “ball and chain” of debt shackled to their leg.