Complex Numbers

Debt is Bad, mmmkay?

It's been a while since I've ranted about fiscal responsibility, and then I read this article today:

http://www.alternet.org/workplace/49676/

The federal government -- and the majority of Americans -- can no longer get by a single day without taking on additional debt. ... Eventually the higher levels of debt will lead to higher interest rates, which will lead to more debt, creating a cycle as vicious as it is inevitable.

I've heard doomsayers before. Most of the time, they're wrong. This time, though...

We're all building a house of glass cards, here. It might blow down, or it might shatter, or both. It is painfully obvious to me that this situation cannot continue for very long.

Inevitably, there will be finger pointing. There is already finger pointing with the mortgage situation. The Federal Reserve is being blamed for allowing the situation. The banks are blamed for providing subprime loans. People are being blamed for defaulting on them. Well, this latter has some basis in reality - they're the ones who signed the papers, and it's their own fault if they don't read the Ferengi print.

Ultimately, I see a society where desires turn into wants, and wants turn into needs, and needs are purchased on ever-expanding credit. Advertisers con us into needing things we never even knew we wanted, and we eat it up. Hell, half the people I know who watched the Superbowl didn't give a crap who was playing; they just wanted to see the commercials.

The idea that someone might watch television for the sole purpose of viewing the advertisements is so alien to me it might as well be someone telling me I really ought to try shoving my arm into a meat grinder, just for the experience.

There have to be alternatives to debt. Some of them might not be pleasant to contemplate - they involve things like living communally, going without certain things, and driving less than 100% reliable cars, and no one wants to hear that.

"Oh, but I need to have a brand-new car." "You've obviously never had hospital bills." "I just can't live with a roommate." I've never heard such absolutism as I hear from people who are in debt up to their ears. [I know I talked about "needing" a stereo in my ride in my last entry, but you'll note I still haven't done anything about it.]

Do I have debt? Yes. I owe money on my house, and I owe money for the business. Both loans are secured by real estate collateral. I don't have a car loan. I don't have credit card debt (I use a credit card for everything, and I pay it in full every month, on time). I have no student loans. Have I been in worse debt? Hell, yes; that's why I feel so strongly about it now. I'm not perfect; I don't have the retirement savings that I should, nor all the insurance normally recommended. And now I'm starting to think I don't have enough hedge against the coming doom.

Before you ask, no, I don't make a shitload of money. I make more than some, less than others - my personal income is below average for my age, and so is my wife's. It's not about what you make; it's about what you spend. And while I admit to many areas in my life in which I'm "lucky," there's no element of chance in this; I chose to have a small debt footprint. Anyone can do this. It takes time, patience, discipline. Less than it takes to lose weight, though - at least for me. More than it takes to quit smoking; again, personal experience.

It won't be enough to ride out the coming apocalypse, though - when the economy collapses, my income stream dries up. That's why I'm preaching. I couldn't give a crap if everyone else has debt, as long as it doesn't affect ME.