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Millennials need to move out and get a life!

  • The number of Millennials living at home with their parents is soaring.
  • Economic challenges are not the real reason why.
  • But this trend does have a very bad effect on our economy.
Millennials with parents
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One of the most memorable Saturday Night Live sketches ever was broadcast in 1986 when guest host William Shatner played himself appearing at fictional Star Trek convention. After fielding one childish question after another from costumed fans in their late 20s and 30s, Shatner loses his cool and shouts: "GET A LIFE, will you people? I mean, for crying out loud, it's just a TV show! ... Move out of your parents' basements! Get your own apartments and GROW THE HELL UP!"

Thirty-one years later, it sure seems like all of America needs to heed that message. Here's why: The Census Bureau now says that more 18-34 year-olds are living with their parents than with a spouse.

This is the scariest economic indicator in America... even though its primary cause has very little to do with economics.

First, let's not pretend that today's millennials don't have serious economic challenges previous generations didn't. The biggest challenge is student loans. The cost of college tuition and fees has soared 63 percent just since 2006 according to the Bureau of Labor Statistics.

U.S. student loan debt has ballooned to $1.4 trillion today. With almost any other commodity, higher prices would serve as a curb on demand. But because of our government-backed student loan system, demand for higher education in America doesn't seem to have any price ceiling.

Swallowing massive debt obligations still isn't enough of a deterrent to the market. The result is we have millions of young Americans straddled with such massive student loan debt that paying the rent or the mortgage is impossible for too many of them.

And it's also become costlier to rent and buy a home in America. Those costs have been ticking up since 2014, after a brief hiatus due to the Great Recession.

So there are definitely some legitimate economic reasons for many young adults to be living at home. Considering the unique challenges they face, you'd expect those young adults to be disappointed in their relative lack of financial and actual independence, right? I mean, it's not all that fun to be economically forced to live with your parents, right?

Wrong. It turns out we have two pieces of important data that prove this is a societal failing that's affecting the economy and not the other way around. First, a 2015 Pew Research Center analysis shows that as the economy improved coming out of the Great Recession, even more millennials were living with their parents. A better economy with more employment and higher wages isn't reversing this trend.

"The real reason more young adults are living at home is because everyone feels more emotionally comfortable with the arrangement. It's not about economic hardship, it's about doing what's easier and more familiar for as long as possible."

Second, we have another Pew report that shows that millennials feel much closer to their parents than people did in previous generations when they were their age. A MacArthur Foundation report from 2008 shows how adolescence in America has become stretched out over many more years with younger adults and their parents spending many more years together is what we sometimes call "quality time."

Thus the real reason more young adults are living at home is because everyone feels more emotionally comfortable with the arrangement. It's not about economic hardship, it's about doing what's easier and more familiar for as long as possible.

So how is this hurting the country's economy now and in the future? For one thing, the natural generational demand spikes for housing, baby clothes, and cars aren't as high as they could be. Why buy a new house or a set of wheels if you're living at home and can borrow mom's car most of the time?

And having a baby? You have to figure out how to bring a date home without waking up your parents first to do that. Talk about a scaled-down "sharing economy." Also, this familiarity and inter-generational comfort serves as a disincentive for young adults to seek out higher paying jobs and take other entrepreneurial risks.

If you think our current big student loan problem is bad, try an America where no one is willing or has the means to buy the expensive homes the Baby Boomers and Generation X'ers were counting on selling to fund their retirements.

Speaking of retirement, think about how bad it's going to be when those same Boomers and Gen X'ers see massive Social Security and Medicare cutbacks because not enough millennials are earning big salaries and making investments like previous generations did at their age. Think about how bad it's going to be when those adult children living at home into their 40s get older and need someone to take care of them in their old age. The negative results are endless.

Birds push their young out of the nest because at some point that nest is going to get too crowded and there aren't enough resources in one small place to go around. Coddling our kids, even in the face of those massive college loans and rent costs, doesn't do much good.

William Shatner and the folks at SNL were just kidding around with that sketch back in 1986, but the ideas behind his comic rant rang true then and they're just as true now. Whether it's economic opportunity or a key rite of emotional passage, America's young adults indeed do need to move out of their parents' basements and get a life!

Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.

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