Good Morning Middle America, Welcome to your King of Simple News Network, where we find news that interests you, in the strangest places.
HOME TOWN NEWS: Last night I was watching a game show (which is something that I rarely do), but when they interviewed the contestant, it caught my ear. The game show host asked the college Senior what he would do if he won the money.
Before I tell you what he said, he had previously divulged that his parents were both educated professionals and that he was studying chemistry and biology. In other words, he wasn’t in college with a grade point average of 1.6 on a football scholarship.
His plans for the money were to throw a huge kegger, go to Las Vegas and gamble, and to buy a new car. His friends thought these were all terrific ideas. They were also college students and fraternity brothers.
The next contestant, a younger single professional, said that if she won, she would take her friends to Tahiti and surf. Are you starting to see a pattern? Heck, I just kept watching the next half hour show.
The first contestant on that show was also a younger professional female who was going to take the money and go to Spain in hopes of meeting an attractive Spaniard and they would live happily ever after. I turned the TV off.
You think I’m making this up don’t you? I wish. I view most everything from an economist’s standpoint, mixed with a large dose of common sense.
What did each of these contestants have in common? No, I mean other that being in la-la land. They are convinced that there is no need for saving. They are convinced that next year will be just as lucrative as their past years. They are convinced that there is no end to the money and the flamboyant lifestyle. I could go on, but in short, these people are ill prepared to live in Reality-land.
So how did they get that way? If I had to guess, I’d say they were raised with those beliefs. Let’s say that a person was 10 in 1990. That’s the year that the U.S. emerged from the last major recession. During the past 17 years, with the exception of a hiccup after 911, our economy has rolled along at an amazing pace.
Money was passed out like water by the FED and credit was available for one and all. Interest was cut to 1958 lows and the real estate express was doing 90 miles per hour on a dead end track.
So, to a now 27 year old college graduate, life has been one big bowl of cherries. The parents were enjoying incredible rising home values, increases in pay, and like any red blooded American, incurred debt up to their eyeballs. But, to the children (now big children) this is the only life they had ever known.
The parents had borrowed some $2 Trillion from home equity and the whole thing had the appearance of year-around Disneyland. Unfortunately for these kids, the next feature playing is year-around Realityland.