Kids Get It

Things they do look awful cold
I hope I die before I get old
--The Who

Was over my sister's house last Sunday watching football with election commercials crowding every break. As sighs went up about how glad we'll be when we would not have to endure election ads any more, my 12 yr old niece exclaimed, "Why don't they use all the money wasted on these commercials to pay down our debt?"

Sharp cookie, my niece.

Increasingly, I suspect that kids and young adults grasp the gravity of our financial situation better than the adults. Because sophistry employed by adults to rationalize problems does not work well on them, kids and young adults are good at seeing problems for what they are. They know that spending all of your money is generally unwise, and that borrowing to spend more is usually very unwise. By observing what is going on at home via strained family finances, they know that debt burdens future lifestyle.

Anxiety is also growing that the mountain of debt being racked up by adults today will need to be paid down by the kids tomorrow.

Indeed, the kids get it. Adults are making increasingly leveraged bets that elevated lifestyles can be maintained with more spending and more debt--rather than dealing with extended periods of austerity necessary to repay debt and replenish savings vital to future productivity improvement. Although kids may not be able to explain it precisely, they are uneasy about the risky nature of adults' bets. They sense the burden that will fall on them if the bets don't pay off.

If the bets fail, then our kids face the consequences of our foolishness.