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Borrowing Tomorrow
by Jack Wellman
2008-01-06 09:51:00
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What kind of nation relies on debtedness more than the United States? With China financing a war in the Middle East and the U.S. sliding ever further down the bottomless pit of possible repayment, now its own citizens are following suit. In the U.S. (latest statistics, 2005), private debt related to credit cards alone, was over three quarters of a trillion dollars ($753 billion), while the United Kingdom’s citizen’s had over 55 billion pounds of debt…Austria topped 50 billion dollars. And the trend is growing exponentially.

Credit cards are a necessary evil. It is good to have one for emergencies, but all too often it becomes a second wallet or billfold. The credit card companies can raise your rates if you don’t use them at least monthly and late fees, changing interest rates, late penalties, etc., can escalate the card’s debt. All the while, the customer is in the dark until they receive the bill.

Further harm comes when people get in trouble with repayments and simply take one credit card debt and transfer it to another or a new one…all the while tending to a growing list of cards. The average American consumer already carries 13 credit cards, while 60% have at least several (3-10), one in four have over 20! And unbeknownst to the client, with each card added, their credit rating goes down.

The only thing easy about credit is how easily credit card companies make money…and how easily people sign up for them. Interest rates can change over night and can easily double and triple for not making a payment or not making a purchase within a calendar month. This could be part of the reason that card holder’s spend 43% more than those who pay only with cash.

New bankruptcy laws have made it much more difficult to walk away from enormous debts and cancel huge credit card debts. Many college graduates start out life in debt of as much as 40 thousand dollars. This is by no means universal. For example Germany had no such designations of bankruptcy in their laws until the mid 2000‘s, since credit card debt was extremely uncommon.

Credit cards are established with a revolving payment plan designed to keep consumers in credit card debt and are not offered with strict underwriting guidelines. They make their own rules, even though Congress has talked about credit reform. However this is aimed more toward home mortgage foreclosures. But there is help available. Google any non-profit debt re-organizer or counsellor and you can get excellent help in managing your debt or consolidate it into one, simple payment. There is no reason you have to drown in debt when there are so many reputable lifelines available.

It’s like we’re holding tomorrow hostage for the conveniences of today. We are mortgaging tomorrow for today. Card companies say "enjoy now and pay later", but procrastination can be financially dangerous. And it is already doing serious harm to the economy. Credit cards are not necessarily bad. They do not cause bankruptcy and debt. They can be a lifesaver in an emergency. But they can also be your worst enemy. One to three cards are all that are necessary. Sadly our culture makes it hard to do many things without a credit card (like rent a car). And that is part of the problem. Part of the solution is sticking with one or two cards and keeping them only for emergency or for allowable expenses, like utilities. If you can do that, it’s a real credit to you. No debt about it.

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Emanuel Paparella2008-01-06 12:00:53
“That man who does not believe that each day contains an earlier, more sacred, and auroral hour than he has yet profaned, has despaired of life, and is pursuing a descending and darkening way.” (Henry David Thoreau )

The above is a passage from Thoreau’s “Walden” which is perhaps even more relevant today when we are all trying to get ahead in the rat race puppet show called “inevitable progress.” We have just seen this movie repeated in the shopping Saturnalia rites that allegedly are a celebration of the birth of a Savior pointing to a different route from the descending and darkening way of which Thoreau speaks. Indeed, the show must go on and the whole world is a stage, signifying nothing…to paraphrase the bard.. As I have already pointed out elsewhere in Ovi (in the article on Henry David Thoreau): …What are we trying to get ahead of and what are we trying to get behind us? What prompts us to look past presence and privilege the future? This desire to get ahead, an integral part of any ideology of progress, seemed to Thoreau a kind of demonic appetite which enslaves the human heart… Indeed, that kind of enslavement is not only a descending and darkening way but it also points to what Kierkegaard called “the sickness unto death,” a spiritual sickness that is fatal but one does not even know one has because even the notion of Mind and Soul as integral part of our humanity has been abandoned.

Sand2008-01-06 12:24:20
Whether or not debt is a problem there is no doubt that it is an essential component of a capitalist society. Business enterprise cannot exist without debt as the overwhelming number of attempts to create new businesses depends upon the incipient businessman being able to throw himself into debt that his projected business success will relieve. Seventy five percent of all new businesses fail so the statistics indicate that people should be wary over their optimism.
But individual debt is frequently dependent upon, not only the assumed capability of the debtor to repay the loan but also that there are regulations to provide a fair system so that the source of the loan cannot create impossible conditions for repayment. It is evident that these regulations are non-existent in current US society and, although the greed of the loan institutions might temporarily make exorbitant gains, in the long run this is unsustainable in a society where usury will inevitably destroy society, the first signs of which are now becoming apparent.

Jack2008-01-06 20:33:51
Sand, you make an excellent point and one that I missed...about the fact that accumulating debt, in an exponential pattern, is unsustainable for people and nations. And that usury has the capacity to destroy present, prosperous societies, even though the current financial systems are somewhat dependent upon credit. Thanks for your insightful and correct comments!

judy2008-01-06 22:04:54
this was so good to read. i hope everyone who reads this will stop and really think about it.

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