Friday, May 7, 2010

Debt

As I was growing up, my folks whispered a subversive, un-American, anti-capitalist idea in my ear. Not only did they teach it to me, they lived it out. That dangerous idea: don't live beyond your means.

Outside of having mortgage debt, they took out no loans. Period. Ever. They always spent less than they made. That meant a humble but functional home. That meant cars that were purchased not as status symbols, but as ways to get around. Those cars were often purchased used, and they were purchased with cash on the barrel head. That meant clothes that...well...might have been in fashion 15 years ago, when they were bought. College for the kids? That was saved for. Home improvements? Paid in cash, after saving for years.

A credit card was a dangerous thing. It...meaning the one and only card you allowed yourself to have...was to be paid off every month, and watched as warily as a bobcat in a nursery.

As best we can, my family has tried as best we can to stick to this approach to financing our lives, while all the while feeling a bit strange. It's just so out of touch with the way the world works. This is not the way we good capitalist consumers have been taught to live. Nor, quite frankly, is it the way that our governments do business.

That is, I'm convinced, why the world increasingly finds itself in such a financial fustercluck. When you can live large, charge after charge, eventually, inescapably, you'll drive yourself into personal ruin. When housing speculation feeds off of the false abundance of irrational subprime lending, suddenly homes are driven out of reach of the average family. When those loans fail, as they inevitably must, our entire financial system totters. When entire nations decide to live high on the borrowed hog of their sovereign debt, the system shakes even more. That shaking hasn't even really begun, kids. Endemic debt has this way of destabilizing societies, be they the ancient Hebrew people or our newfound global community. That's the reason debt was viewed so warily by the Torah. A society that allows indebtedness to run rampant..at any level...will eventually tear itself to pieces.

We also forget, even in this putatively "Christian" nation, that the our sacred texts never ever no not never teach that the false abundance of debt-driven living is something worth seeking.
Do not be a man who strikes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.
I can't imagine that our comfy bed of debt will still be under us, as a nation, for very much longer.


4 comments:

Jonathan said...

Debt-mongering isn't just an 'Mericun deal. That's becoming more and more obvious recently. It's all part and parcel of that most human of conditions, covetousness. If we could all just be content, eh?

My mom's English (or should that be "me mum's...") and grew up as a little girl during the war, and being a single mom excarebated her hard learned frugality. My dad was also no fan of credit and "thrifty". That all went over my head. Now at 38 years of age I have come to the conclusion that credit cards are "The Devil, Bobby Bouche!"

The only debt my wife and I now have is the house note. One day, one day we will actually own the house we live in...well, we'll pay property taxes, school taxes, M.U.D. taxes, H.O.A. dues, etc. but...we'll, uh, own the...forget it.

newworldview said...

So basically, Jonathan, your home is collateral for your never-ending 'debt' to the state.

It seems to me that government policy encourages people to take on more debt than they would otherwise. Isn't it the government that fixes interest rates, permits fractional reserve banking, 'regulates' securities trading, and 'insures' bank deposits?

And really, when you stop and think about it, can you conceive of a kinder, gentler way to enslave people than lending them enormous sums of money?

Jodie said...

There is another more subtle malady of our current economic condition that is warned against in Scriptures.

Efficiency.

The corners of the fields are to be left unharvested. The animal that pulls the plow is allowed to eat of the land it works.

It shows up in Revelation too, the third horseman of the Apocalypse holds a scale and a voice says. "A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine."

It is a well known thing in systems analysis that the search for efficiency - driven by greed - leads to inherent instability. The best example being in aviation. Something known as flying in the coffin corner. Planes are most efficient at an altitude where the max speed and the stall speed converge. You milk the most performance out of the plane just before you stall and drop thousands of feet and possibly rip the wings off due to stress.

They used to call in "clear air turbulence"

All of the computer aided trading and big banking rules and modern business management practices are based on maximizing efficiency. We are trying to harvest every last corner of our fields. We are not letting one drop of oil go to waste.

We are all flying in the coffin corner.

Jonathan said...

@Jodie, have you ever read any Wendell Berry or Jacques Ellul? They are dead on in regards to what "effeciency" has done for us when applied in a wanton fashion. Progress for the sake of progress and what not. Give 'em a read if you haven't. Good stuff.