DRAFT– (im)morality of debt
This is an idea I wish to develop more.
Posting an early draft version, full of flaws
The morality of US debt
I did a favor for someone recently, which involved money. They thanked me and said they didn’t know how they would ever repay me. I said getting the money back would be enough.
Debt. It is essential to social function, to a functioning society. But even more important than debt is debt forgiveness, redemption. Debt is obligation, debt is bondage, and ultimately, debt is slavery.
Elizabeth Warren and Amelia Tyagi, writing in the Boston Review in 2005, discuss the sorry state of middle America’s finances. There seems to be a cry from the right wing and from banks that this is middle America’s fault, that if only they weren’t so consumer crazy, always buying the latest and best fasion and gadgets, all the while living beyond their means, then they would be in better shape. The cry was turned into a major re-write of bankrupcy laws, laws which were in essence written by the lenders.
But the data does not show that Americans are overspending, in fact they spend less of their income on food/restaurants, clothes, appliances, cars, etc. then they did in the 70’s. Instead, they face higher costs, for taxes, health insurance, child care.
My neice was unemployed for a period of some months. She doesn’t have a savings built up because she is young, having just graduated college, and hasn’t had time. So she lived off her credit card. Irresponsible? I hardly think so. The bank charged her 24% interest on the credit card loan. How do you repay a debt which has an interest rate of 24%? Who is acting immorally here? In her defense, the debt has been repaid, along with the usurious and exploitative interest charges.
And wait a minute, wasn’t it these same prophets of the right who encourage middle America to spend? Who was it who urged us, as our ‘patriotic duty’, to go shopping after 9-11? Since when did consumption become a patriotic duty?
That question has, in fact, been answered in the great BBC documentary ‘The Century of the Self’. This describes how the industrial revolution lead to excess of capacity, threatening the foundations of the industrial society, and, more importantly, the bank balances of its leaders. Something had to be done. Something was done. Advertising convinced us that the route to personal fulfillment was through buying things. This is a message which is continually rammed down our throat, in ever sophistocated means. It is, in fact, a precept. If we measure a country’s growth in terms of GNP, then GNP must increase each year, which can only happen if consumption also increases each year. Our economy is built on a model of continually and exponentially growning consumption.
Whenever the right wing gets moralistic, they turn to Christianity to back themselves. This is quite odd when applied to debt. One wonders what would happen if they prayed the Lord’s prayer, the way Jesus taught us we are supposed to pray. “Forgive us our debts, as we have forgiven our debtors. But was Jesus talking about money here? Well, yes, he actually did have a few parables about people who owed money. Nor should we forget the Year of Jubilee, as decreed by God the Father, during which all financial debts are forgiven. Certainly the debts in the Lord’s prayer are more than financial, but just as certainly they do not exclude the financial.
And at this point it is also instructive to think about where all this money which we supposedly owe comes from. Did the banks take from their hard-earned resources, which they had carefully built and saved over the years, and risk them to help us? Not hardly. Thanks to the glory of fractional reserve banking (and yes, this is a good thing), the money is, in fact, something they just made up.
And didn’t we, in fact, just spend billions (or was it more) of OUR money, earned by the sweat of our brow, via our taxes (remember that the ultra rich and the corporations do not pay tax, only middle America), to bail out these banks?
Something is very wrong with the Repulican party