Inside Debtors’ Prison, London
There is an issue dancing around the the political debate,
being bandied in intellectual argument and stark statistics, which
really deserves to be front and center. It runs through the American
political and economic firmament like the holes in Swiss cheese. It
affects virtually every family in the country on a visceral, survival
are talking about Debt.
The form in which Debt has been permitted to penetrate
the public consciousness is as part of the discussion of the US national
debt, the deficit and federal spending. As Kerry has lately been lamenting,
without much appear ant effect we may add, President Bush has presided
over the most dramatic financial reversal in American history, in terms
of the Federal Government’s fiscal balance. But much more significant
is the form in which the phenomena preys, day and night, on the national
subconscious – Consumer Debt.
It is the contention of the Dowbrigade that these two
phenomena are not only related, but part and parcel of a moral and
financial cancer that is eating away at the core values and economic
stability of the United States – a debtors mentality that threatens
to rot out
the core values and real value our forbears have spent 250 years building
This Debt Mentality functions like a sort of financial
fractal. On the macro side of the scale, the current US National
Debt weighs in at $7,423,452,113,793.29, according to the US
National Debt Clock. This works out to $25,207.79 for each of the
almost 300 million citizens of our great country. Every baby born in
every maternity ward in America bursts into the world under the onus
of a $25,000 debt to our country’s creditors, a bunch of shifty and
avaricious foreigners for the most part.
25 Grand might represent a nice vacation for Kerry,
Bush and the other pols
agenda, but for millions of Americans it is more money than
they will ever see in one place or have in their bank accounts.On
a personal level, the Dowbrigade’s modest family of four is responsible
for over $100,000
of this debt, contracted on our part by a series of elected leaders
who somehow neglected to send us periodic bills to let us know that
our account was climbing. Although we have moved so frequently over
the years that maybe the bills just never caught up with us.
So knowing that our government leaders are big fans of
spending more than they have coming in, and hearing debt figures in
being bandied about without the batting of an eyelash, is it any wonder
that Mr. and Mrs. America avail themselves of a few of the many, almost
daily offers of easy credit finding their way into mailboxes, email
boxes, computer screens, raid airwaves, TV commercials and periodical
advertising? It would almost be unpatriotic NOT to buy a few things
on credit, at least if you listen to that nice Mr. Greenspan.
Besides, if we are already 25 G’s in the hole for promises
the Government made on our behalf, what’s another few thousand to get
by while we work off the debt? The result of this kind of thinking
is a mountain of personal debt which has grown like a silent cancer
on the body politic, and now threatens to overwhelm both the national
psyche and the circulation of capital on which the nation’s economic
According to recent
figures from the Federal Reserve Board, consumer debt rose to $1.98
trillion in October 2003, up from $1.5 trillion in 2001. This
represents credit card and car loan debt alone – itt excludes mortgages.
It represents approximately $18,700 for each US household.
According to CNN
"The American consumer has become
deeply addicted to spending, running up ever higher levels of debt
in order to live in a fashion that is beyond his means. And the world
has become equally addicted to the consumer continuing to burn through
It’s a dangerous situation — potentially a bubble that dwarfs even
the U.S. asset bubble that burst in 2000 — and it will be a challenge
to keep it from ending badly."
Debt is an inherent feature and a useful tool in the
economic system we call Modern Capitalism. In theory, as the economy
generates excess capital, it collects in the hands of certain individuals,
who reinvest it to continue the cycle of capital creation. Entrepreneurs
use debt to create economic opportunity and employment.
However, another tenet of modern Capitalism is that
economies expand and contract in cycles. This seems to be an economic
law that predates even capitalism. When the economy contracts, people
who have accumulated excess capital can protect it, by investing in
bonds – basically loaning their money to the most credit-worthy players
on the scene – major US corporations and the US Government, the greatest
corporation of all.
But people with no appreciable savings, people just starting
out, people in lower-paying jobs, go into debt when the economy contracts.
Which is all fine and good. We don’t want them starving to death
while waiting for the inevitable expansion to begin. According to classical
economic theory when the expansion arrives, their incomes will go up,
and they will be able to pay off their debts and continue down the
road to economic well-being and eventual membership in the Republican
But during the second half of the 20th century we have
developed a situation wherein massive, widespread consumer debt is
not a periodic phenomena
but a permanent condition. It is a condition from which over a hundred
million Americans are suffering today. Debt is a weight on their shoulders,
an anchor on their dreams and chains around their souls.
Up to a point, debt is a stabilizing influence. It ties
people to one place, one house, one job. It gives them a reason to
get out of bed and go to work in the morning. But when debt gets to
the point that it is a constant ogre lurking in the back of the mind,
when it causes the knotted stomach and the metallic taste in the mouth
of not knowing how to pay the bills at the end of every month, when
it becomes compulsive and pathological and interferes with the ability
and women to
their jobs, or to even have jobs to do, then the very economic existence
of the nation is in danger.
Permanent debt is a debilitating, humiliating condition
with severe negative health, psychological ,moral effects. People in
debt feel guilty, depressed, worthless, ashamed and afraid. Most are
in denial, and think of their debt as little as possible. The subconscious
burden of accumulated debt can cause physical illness and aberrant
The end-stages of the debt spiral are not pretty. Bankruptcy
and an extended sentence to wage slavery is the best possible outcome.
Ending up indigent on the street is a real possibility and an increasingly
common result. Some end up outside the law, entering into fraud,
flight or identity theft. Others become institutionalized, addicted
to alcohol or drugs, or die as a result of a combination of these
To make matters worse, these sorry individuals suffer
of social disapprobation and marginalization. in the Puritan ethos
a debtor is weak, flawed individual.
It is his or her lack of self-discipline that is at fault.
When debtors represented a tiny percentage of citizens
and debtor’s prisons were still in vogue, this was a workable philosophy.
But today, the debtor class includes A MAJORITY OF THE POPULATION!
The reality is that these
are not bad, evil, lazy or immoral people. These are honest and
hard-working Americans who by the luck of birth, or ability, or temperament
have ended up in low-paying jobs or industries in transition, and have
fallen into one of the millions of clever debt traps vying for space
and attention in the credit scam feeding frenzy.
Listen to Bob Herbert, writing on the New
York Times Op-Ed page last week:
"For the families in these lower-income brackets,
life is often a harrowing day-to-day struggle to pay for the bare
necessities. According to federal
government statistics, the median annual rent for a two-bedroom
apartment in major metropolitan markets is more than $8,000. The annual
of food for a low-income family of four is nearly $4,000. Utility
bills are nearly $2,000. Transportation costs are about $1,500. And
there are costs for child care, health care and clothing.
You do the math. How are these millions of poor and low-income
families making it?"
The answer is debt, the coin of the realm as we dance
into the fantasy land of the American Millennium. We are a society,
a culture and an economy built on debt. And debt, at its core, is built
on trust. We trust you are going to pay us back. When we wake up to
the fact that this became impossible long ago, then the real payback