The single largest debt the average American holds is a mortgage, by a long shot. Student loans have recently taken second place. Behind that, however, is that trusty American stalwart of debt obligations: consumer credit. After the 2008 Crisis, the country de-leveraged a lot of its household consumer debt (see the $200b dip in the graph). But that deleveraging craze seems to be over, and the amount of consumer credit per household is back on the rise. But does this bounce-back signal the end of the effects of the Great Recession on consumer credit, or is there a more permanent effect that has yet to play out on a measurable scale?
AdBusters ran an article called "The Satori Generation" that lays out the following trend, happening most measurably in Japan (and South Korea): a generation of young adults, faced with exploding education costs, depressed job prospects, and weariness about the future and effects of consumer culture on their lives, their society, the environment, etc., are making a conscious decision to reject all of the above. They are rejecting norms of courtship, marriage and family; buying less expensive, and less (fewer cars, houses, clothes, consumer goods, etc.); living with their parents longer; and subsisting on part-time work.
The most revealing exchange from the AdBusters article is this: on a Coming of Age Day celebration (a Japanese holiday celebrating everyone who turns 20 that year), a 50-something guest on a talk show asked a 20-something sitting across from him: "Don't you want to get a nice German car one day? Don't you want a pretty young woman to take on a Sunday drive?" to which the young man replied "I'm not really interested, no."
While the attention has fallen on Japan's "Satori Generation" for this trend, there are similar movements across Europe and the United States (and probably elsewhere that I am ignorant of) of young adults moving in the same direction. Speaking as a 20-something young adult in America, I will testify anecdotally to a huge number of my peers who have the "I'm not really interested, no" attitude, especially when compared to older generations. At the end of the day, this means that a lot of people just aren't interested in credit cards. What will this mean for the future of consumer debt?
I will leave you with an inscription I found on a bench in the Minneapolis Sculpture Garden that I think tidily sums up this trend:
"Affluent college-bound students face the real prospect of downward mobility. Feelings of entitlement clash with the awareness of imminent scarcity. There is resentment at growing up at the end of an era of plenty coupled with reassessment of conventional measures of success."
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