Debt Sefdom in America

[Mr_Jefferson_24]

By Liaquat Ali Khan

Carrying debt has become a quintessential attribute of American life. And creditworthiness, the ability to borrow money, is the most valued personal asset an individual may garner. Credit monitoring companies gather information about an individual's "bill payment history, loans, current debt, and other financial information." Credit reports also inform money merchants where the individual works and lives and whether the individual has been "sued, arrested, or filed for bankruptcy." Losing creditworthiness can have more severe consequences for an individual than losing liberty, even body limbs.

Interest rates ranging from 3% to 30% lie at the core of the credit market. After nullifying laws against usury, federal and state legislatures have rewarded money merchants with handsome legal names, such as creditors, mortgagees, card issuers, and secured parties. In turn, money merchants use various "credit products" to compose the ensemble of interest rates. They sell money for fixed periods with structured payments, such as a 30-years mortgage. They sell money as endlessly spinning Ixion wheels, known as credit cards. These credit spinning wheels could carry an interest rate over 30% for individuals with questionable credit. Occupying all nooks and crannies of American life, the money merchants have unbolted an ever-expanding credit juggernaut, much larger than equity markets. The Federal Reserve Board controls the interest-rate push button to modify the behavior of Pavlovian money merchants.

Credit products are sold as fantasies of power, comfort, and freedom. Owning a home has become the most heavily debt-infested American dream. Living modestly with a less ambitious spouse in a little prairie house (nondescript apartment) warmed with children's love is old-fashioned foolery that might make sense in Bangladesh or Kenya. Not here, not in credit-driven America. Here, while the family is shattered beyond definition and while many children putrefy in unsafe homes, money merchants keep enticing Americans to dream big: Get it now and pay later. The virtues of mortgage have been sold hook, line, and sinker -making breathing difficult. Many people, by no means hypochondriacs alone, live in enormous homes but fear homelessness, an eventuality that can befall if you lose employment or medical bills pile up over and above a life-threatening illness.

http://www.informationclearinghouse.info/article43390.htm

[yeoman6987]

1. Back in the day people paid cash for everything including a house

But it takes time and discipline to save up that much. Everyone wants it yesturday. Creditors have something people want. Money! If you want the money you need to fall in the modest requirements they ask. It's not hard to have a decent score. In fact most companies don't even turn in negative credit until you are 90-days past due. How else should they guarantee being paid back for the money you asked for?

[DesertFlower]

3. i remember those days. credit cards did not exist, except for

"diner's club", etc. a few department stores had credit cards. in '67 i opened a checking account with citibank. a few months later they sent me without my asking for it "the everything card" which later became master card.

my in-laws paid cash for their house -- $13,000, but were advised to establish some credit. where did they get the money? my mother in law inherited it.

couldn't help thinking about marco rubio. did he really need that second home which he defaulted on? talk about wanting it all right away. he is a great example.

[TeddyR]

5. Yeah

I'm sort of in the "if you can't pay cash don't buy it camp," but like many others I charge items, but I do so knowing I'm going to have to pay the bill. It is only "debt serfdom" if you charge more than you can pay for, and that isn't the creditors fault.

[Mr_Jefferson_24]

9. It's only debt serfdom...

...if society is structured such that you MUST have money to live, AND stagnant wages for those lucky enough to have full time employment make it difficult to earn enough to live decently (not to mention the massive numbers of under and unemployed) AND money merchants (usery sharks) are given free rein to deceptively market "easy money" solutions that drive massive numbers of people into perpetual debt slavery.

American society satisfies all the requirement for being one of debt serfdom.

Here's a pretty good primer on how our crooked debt enslavement system works:

[Igel]

11. If you must borrow money to live.

In unreasonable ways for necessary things.

Money lenders have always been around. Often they've been better off family members.

If you're not focused on obligatory debt, you shouldn't be calling it "debt" serfdom. Perhaps "currency" serfdom is what you're after?

People have needed money to live in pretty much every organized society for the last 4000 years.

Even actual serfs needed money. Their "debt" was corvee or some such obligation.

Much debt--including, BTW, for things like houses--isn't necessary. I see people with "needs" that are purely psychological but which they oddly feel very intensely. "I need that" whatever, even if they didn't know it existed two weeks before and they'd be fine without it.

[Mr_Jefferson_24]

6. Way back in the day...

...usury was illegal.

The grossly disparate distribution of wealth in the U.S. is a stark and irrefutable illustration of the immensely damaging effects of our usury driven system of debt slavery.

Our laws are supposed to protect and serve the citizenry, not enslave them.

[nxylas]

10. Time and discipline and cash

Wages were a good deal higher in real terms back then. I don't have the statistics to hand, but I do know that a much larger proportion of the population was able to afford a middle class lifestyle on a single income (as opposed to two people working five jobs between them).

[DesertFlower]

2. my grandparents never owned a home. out of their

7 children, only 3 were able to. i grew up in a "cold water flat".

when i was 11 in '53 my parents were able to put $500 down on a 2 bedroom, $10,000 house in the burbs. when i was 17 i moved back to my grandparents apartment.

i lived in apartments with 2 different husbands until i was 48. that's when we moved from queens, NY to phoenix, az where houses were affordable.

the neigborhood we lived in for 14 years before moving had mostly apartment buildings -- some 7 stories -- others high risers.

taking the bus to work every day i often wondered why so many people lived in apartments. they were well dressed -- some of the women had mink coats. maybe they didn't want to travel from the distant burbs where housing were affordable. hubby and i were those people. we worked long hours and didn't want to travel to the burbs every day. it took about 40 minutes to get to work from where we lived.

so many people who did live in the burbs said it was worth it.

my friend's dad bought a house in the burbs trying to make a better life for his wife and 4 children. then he drove in traffic 2 hours each way to his job in brooklyn where he drove a delivery truck all day. afer about 10 years they finally sold the house and moved back to queens.

when we did buy our house we made sure we put 20% down. our mortgage payment was $1290 a month, but interest and taxes were deductible.

we had 2 small car loans and some credit card debt.

now i'm a widow and debt free except for 2 credit cards which i use for everything. i get 1% cashback -- sometimes 2% and pay the balance every month. it feels good to be debt free.

[Mr_Jefferson_24]

8. Good for you DF...

...and thank you for sharing that

[Cartoonist]

4. This is a bit much

Losing creditworthiness can have more severe consequences for an individual than losing liberty, even body limbs.
---

I've been sued and lost. I've been homeless. I'd have filed for bankruptcy, but I can't afford it. If we still had debtors' prisons, I'd be sitting in one, and not be willing to trade so much as a finger to get out.

[Mr_Jefferson_24]

7. I'm sorry for the ...

...hardship you've endured, but I don't think the author exaggerates the ruinous effects on a business or individual the money merchants can mete out with their credit scoring system.

Here's a pretty good primer on how our crooked debt slavery system works: