Debt in Western Culture

by David George

In preparation for the Financial Seminar I’ve been reading from Dave Ramsey’s book The Total Money Makeover. It has been eye-opening to realize how much of the American economy revolves around people taking out loans to buy stuff and enslaving themselves to lenders in the process.

In the midst of the financial crisis you would think that people would realize the folly of this. In essence banks have given out too many loans to too many people. They finally reached the “enslavement capacity” of society when too many people had acquired too much debt and they stopped taking out (or were unable to take out) anymore loans. But instead of seeing the folly of our ways, politicians and people alike have criticized the banks for not lending enough. They are blamed for the economic downturn that ensued when the credit crunch began.

In reality the cause of the downturn was our own impatience. We wanted to buy things now, instead of later when we had saved up the money. So we bought houses, cars, furniture, appliances and whatever else we wanted on credit until we could no longer afford anymore loans. Individuals consumed more than they produced until they were forced to stop. Now everyone is suffering from the inactivity of the consumer who is shackled with debts they took on because they “had to have it now.”

Most of the remedies that have been cooked up have revolved around reducing interest rates to ease the credit crunch and increasing consumer spending. What we really need to do though, is to begin living below our means. We need to pay off our debts and refuse to get into debt again. We need to take responsibility for our own financial futures. Some will do this and some will not. What will you do?