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Affluent Christian Investor | September 28, 2023

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The Bubble vs. the Baby: How the Student Debt Bubble is Crushing Fertility


Debates over whether or not there is an “education bubble” — including  whether or not student debt is, at this point, a net good or a net bad — have become almost commonplace. We also see a lot of discussion about when we might see a real economic recovery and what the real prospects for growth might be.

This story on the NBC Today website, Dreams delayed or denied, young adults put off parenthood, shows us that student indebtedness, and a depressed job market, are not just hurting the present economy but are is also contributing to a huge drag on the future economy: the encroaching demographic winter.

“Flores and his wife, Karlee, grew up in religious homes, got married soon after graduating from college and assumed that they would also be young parents. Instead, the Salem, Ore., couple has started to wonder if parenthood is in the cards for them at all… Daniel is currently making about $17 an hour as a case manager for the Oregon division of child support. Karlee makes about $13 an hour as a business manager for a carpet company. Both say they are grateful for their jobs. But Daniel, especially, said he still feels like he is trying to find the type of career-track job that would allow him to make enough money so that Karlee could stay home with their children. The couple also has about $60,000 in combined student loan debt, and their monthly student loan payments are one reason they are living paycheck to paycheck.

Flores and Karlee represent a trend. Birthrates have sunk significantly since 2007, especially among young women.

For readers who have been taught the overpopulation myth, the impending disaster may be hidden from their view. But unless something changes dramatically, America’s de facto one-child “policy” is going to bring economic stagnation. (This is especially true in countries that provide for the aged by a pension system that requires more working young people than retirees.)

Economic bubbles are misallocated investments and resources. The lesson of Flores and Karlee is that, during a recession and anemic “recovery,” in a culture when it is easier than ever to not get married and not have children, a further and more massive misallocation is easily made. A demographic winter gets arranged in order to pay bills. Present indebtedness leads to less people in the future.

Investors will want to find regional economies where the population is growing either through babies or immigration or both. Hopefully people will wake up and “get busy” so America becomes one of those economies.

Clearly, any policy that encourage heavy debt loads on young couples is a nationally destructive policy.


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