Numerous data points suggest that Western youth are increasingly
disenfranchised, mal-educated and in debt. How that will affect investment
outlooks is unclear. The good news is that some Millennials – in Canada of
all places – are starting to fight back.
So says Aaron Gunn, executive director of Generation Screwed, a movement
sponsored by the Canadian Taxpayer Federation. The group will be conducting
its annual retreat of volunteer student coordinators later this month in
Quebec City.
There they will upgrade their strategic planning, team building, and
activism skills, which they can bring back to campuses across the country to
raise awareness of critical issues, such as government debts, unfunded
liabilities, and unfavorable demographics facing today’s young.
“We call ourselves “Generation Screwed” because governments are spending
money but leaving the bills behind for the young to pay,” says Gunn. “Apathy
is our biggest challenge. Many youth are so burdened with the demands of
getting a start in life, they are unaware of the lousy hand they are being
dealt.”
The key driver of Generation Screwed’s popularity is the country’s rising
national debt, which according to the
organization’s debt clock , now exceeds $600 billion. And that doesn’t
include provincial and municipal obligations. Worse, according to Gunn, the
federal government’s 2016 budget projects $99 billion in new borrowing during
the coming four years.
Less sex, but "screwed" in so many ways
“Generation Screwed” seems like an odd name for a generation which,
according to a recent Washington
Post article, is having less sex than previous generations. That said,
the movement Gunn leads is particularly timely because Millennials are – to
the use the CTF’s term – being “screwed” in so many ways.
The average U.S. student debt is now USD $27,000 - $1.2 trillion overall, according
to the Economist Magazine .
Worse, due to the power of academic interest groups, teachers’ unions, and
the politically correctness movements, students’ education is increasingly
disconnected from reality and poorly adapted to the job market. Most students
learn essentially nothing about money management, for example: one of the
most important life skills.
Upon graduation, students enter what Donald Trump calls a “rigged”
economy, where older workers are entitled to union, government, academic, and
other jobs with benefits that are protected by a slew of credentialism
strategies. The young get stuck with unpaid internships, work part-time, or
do contract work.
Given their poor financial, employment and educational circumstances, not
surprisingly, more than half of 18-34 year olds live with their parents, according
to Pew Research .
Three quarters of declining productivity: a “new normal,” secular
stagnation … or decline?
Lack of new blood in many protected sectors, ranging from governments,
“too big to fail” banks, and the automotive industry, will almost certainly
hit productivity. In fact, that may be happening already. Recent U.S. GDP
data show that productivity fell for a third straight quarter in Q2, a first
in more than three decades.
Bill Gross, a portfolio manager at Janus, has described today’s economy of
rising trade barriers, household deleveraging and increased government
regulations as a “new normal.” Larry Summers, a former US Treasury Secretary
and others suggest the US economy is in a period of “secular stagnation.”
For long-term planners who worry about funding pension plans, managing
government debt (nobody talks about paying it back anymore) or building
careers, the stakes are high. That’s because things are likely far worse than
even Gross and Summers, both of whom are restricted in what they can say due
to the institutions they represent, will admit.
According to a range of researchers - including Laurence Kotlikoff, John
Williams of Shadow Statistics, and the Fraser Institute, - the United States
and Canadian governments regularly use massaged data and off balance sheet
liabilities, to paint a brighter picture than actually exits.
No sympathy from governments
Gunn and Generation Screwed remain undeterred. This despite the long odds,
and tough opponents – particularly seniors’ groups lined up against them (in
the United States, the powerful American Association of Retired People lobby
group, for example, will stop at nothing to protect members’ existing
entitlements – the country’s youth are an afterthought).
Nor are Millennials likely to get much sympathy from governments, which
increasingly resemble hospital geriatrics wards. The average age of a U.S.
Congressman is 61. That of a Canadian Senator is 65. The
average age of a U.S. Supreme Court Justice will be 75 by the end of the
current U.S. Presidential cycle.
“I know the odds are long,” says Gunn. “But changing mentalities is a slow
process. We just keep focused on doing it one person at a time.”
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Peter Diekmeyer is a business writer/editor with Sprott Money News, the
National Post and Canadian Defence Review. He has studied in MBA, CA and
Law programs and filed reports from more than two dozen countries.
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The views and opinions expressed in this material are those of the author
as of the publication date, are subject to change and may not necessarily
reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the
accuracy, completeness, timeliness and reliability of the information or any
results from its use.
