I’ve been thinking about debt lately. It is a virtual impossibility to go through life in the modern age without borrowing money from outside sources, whether that means using a credit card to buy gas, financing a mortgage on a home, or attending an institute of higher learning. The present system is built around the idea of paying for things in installments while people rich enough to lend make ungodly amounts of money from the interest we pay for privilege. I’m not telling you anything new, but I’ve been thinking about it for a while now, even before the much ballyhooed. rumblings of the lending market.
Admittedly, my economic acumen is spotty. I tend to get that glazed look in my eyes whenever I hear words like fiduciary, subprime, or macroeconomic. Also, I am one self-centered son of a bitch. This means that most of my thinking has revolved around how credit, lending, and debt impact my personal life. I’ve been contemplating a rather large purchase that I would have no choice but to go into rather significant debt to sustain. This wouldn’t be something new for me, either. Like many young Americans, I went a little crazy in college. I was young, newly independent, and largely ignorant of how finances worked. As a result I was unable to resist the siren song of the free t-shirts that I received just for signing up for a new credit card. You’ve seen these guys at your campus. They sit behind folding tables with a box full of shirts and preloaded clipboards. All you have to do is sign on the bottom line. I can’t blame them or shift responsibility for my own actions, but there is something slightly sleazy about the way lenders target college students. At one point, I had twelve different cards. My wallet was stuffed with the things, swollen at its hinges by their plastic weight. It took me years and years, and quite a bit of help to scrape my way back to an even ledger and I am seriously contemplating going under again. I know that this time, it’s more of an investment but I am wracked by doubts that it will ever pay off for me.
These thoughts were bouncing around the edges of my consciousness as I sat down to watch Maxed Out,a recent documentary from the unfortunately-named James D. Scurlock. I say unfortunately because I went in to this film after casually (and lazily) scanning some write-ups, fully expecting a film from Morgan Spurlock (of Super Size Me fame). Not that it really matters, but that is not what I got. The end result is a fairly thoughtful examination of American debt from different perspectives, from a woman whose elderly mother killed herself after accruing an outrageous debt to two mothers whose children committed suicide after running up their credit cards in college. The film also looks at mortgage lending, governmental debt, and the fallibility of the credit reporting system but the focus is clearly on the human tragedy. And that tanked it for me. It should have been an examination of different forms of debt and the ways in which our culture perpetuates the cycle and instead it trades analysis for histrionic scare tactics. There are moments when the film inches toward the depth I was looking for, but they get overshadowed by the moments when the filmmakers insist on over-contextualizing the problem. I understand the urge, but showing images of a crying woman watching their relatives car getting pulled from the river is far too heavy-handed.
It did get me thinking though. I understand that lending is a vital part of the free market, Responsible borrowing is essential to the system and the practices that are most predatory can easily read as simply good business. While I find the notion of targeting those too ignorant, desperate, or helpless to know that they should not get a payday loan with 250% interest or apply for a Visa card to pay their phone bill reprehensible I can’t seem to get away from the notion that personal responsibility lies at the center. No big bad credit card company forced me to get twelve cards and run them up. I did it to myself. The notion that “Debt Is Slavery” is true in the sense that the current system can create virtual serfs who work because they have no choice and virtually no chance of ever getting to even. But it is a self-imposed manner of slavery. I think the solution is for people to educate themselves about debt management and try to keep themselves out of the cycle. There are several debt-counseling services and financial advice outlets floating around out there for people to use. I just can’t get behind the notion that tighter legislation of the lending bodies or federal reserve action will solve the problem for the man on the street. As long as there is a desire to live above one’s actual means there will be a lender to oblige, whether it is Providian or Louie the loan shark. I want to keep myself as debt-free as possible, but the only way to do that is to take responsibility for my own actions and not blame the banks for giving me enough rope to hang myself. At the same time, the act of borrowing is endemic to the system and I can’t see any way to live without some kind of credit.
That’s the only way to break the shackles.
See Also: Intelligent Does Not Equal Wealthy