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Summer Vacation? What Vacation?

Summer Vacation What VacationSummer is allegedly vacation season, but it hasn’t felt that way to me in years. Summer is the busy season for mortgages; kids are out of school or back from college; neighborhoods are bustling with people moving in and out. I really should start taking vacation in the winter; summer seems to be when everyone is doing everything.

The honest truth is that there is no vacation season—especially not in today’s world. Society is too fast-paced, and keeping a competitive edge means never taking a break. Naturally, some people place a high value on leisure time. They’re often the same people working below their talent level so they can go home each night without having to worry about work. If those are your priorities, great! But if not—if you regularly leave your work at work, take regular vacations, and can’t figure out why you’re not reaching your career goals—you must accept that leisure and productivity are mutually exclusive.

This is a difficult compromise considering the high value we place on leisure and down-time, and the increasing number of people we see relaxing all the time. If you’re a Baby Boomer, you’ve probably noticed an entire generation of Millennials moving back home, working less-than-full-time (if they’re working at all), and generally avoiding all responsibilities. It may seem an envious position to be in, but it’s not. Millennials may work less, sleep later, and live at home, but the plight of Millennials is dire. They’re living like bums because they have no better prospects. They’re burdened with student loan debt; consumer credit is tight; job prospects are dim; and there seems to be no relief in sight.

The student loan bubble may end up being the most disastrous credit bubble in modern history. As with all credit bubbles, it disproportionally redirects resources from some sectors of the economy toward others. The massive building booms and campus expansions seen at colleges across the country come at the expense of homes, cars, and furniture that would have been bought if Millennials hadn’t already pledged a trillion dollars (and counting!) in tuition to these colleges. Those homebuilders, car dealers, and furniture companies, in turn, can’t hire new employees (that is, Millennials) because nobody is buying their products.

See how that works?

Millennials are largely on vacation because they have no choice. But the rule still applies: leisure and productivity are mutually exclusive concepts. Millennials are so far not as productive as past generations, and they’re putting off homeownership and marriage far later than past generations as well. The decisions they’ve essentially been forced to make are having effects throughout the broader economy. Worse, there is no second chance for them: student loan debt is one of the few types of debt that is not dischargeable in bankruptcy.

There is hope, however. Many young individuals who are burdened with student loan debt are working diligently to pay it off. Many have moved back home with their parents to save money and get themselves on stronger financial footing. These are positive things and should be encouraged as much as possible.

It feels like the whole country has been on vacation since 2008. People are working fewer hours in jobs that don’t fully utilize their skill sets. Young adults are spending 6, 7, or 8 years in college. Unfortunately, this is largely involuntary. It’s this way because there are no better options. Some demographers and economists predict we will snap out of this in 2020, when the Millennials reach the productive peaks of their careers. Let’s hope they’re right. If this vacation goes on any longer, the stress might kill us!

6-21-14 Summer Vacation? What Vacation?

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About Jay Garvens

Standing at the intersection of our local real estate market and the nationwide financial industry, Jay Garvens gives you the complete picture of every story affecting today's mortgage market! From personal finances to the political decisions moving markets, tune in for a weekend dose of straight talk from Colorado's most candid mortgage industry commentator! Honest, unbiased, and always unpredictable, Jay explores every facet of today's mortgage industry with an approach that's refreshingly blunt and enormously entertaining!

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