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In case nobody noticed, the country has been run on a vast array of debt instruments for quite awhile now.
It is our common concession to the imperfectability of humans that we can all have a little more than we deserve, a little sooner than we can afford it, perhaps even a lot more of what we could never, ever have afforded.
National debt, consumer debt, credit card debt, savings and loan debt, hedge-fund debt, mortgages, home-improvement loans and industrial revenue bonds. What ever happened to layaway?
Here are two statistical warnings that we may know but haven’t grasped:
The Federal Reserve tells us that consumers’ credit debt has gone from $8 billion-worth of today’s dollars in 1968 to $880 billion today. That’s 110 times as much in 40 years.
“Bottom line,” wrote Dennis Cauchon in USA Today last year, is that “taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3-percent increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined.”
Both major parties are culpable. We can argue about which imbecile has been worse or more negligent some other time.
Without debt, New York, where much of the world’s debt has been brokered for a point or two, would be a third-world regional center.
Without debt, very little would get built or made. No shopping centers, no casinos, no highways, no airports. No power plants. No ethanol. No war. No Christmas. No whoopy.
With great heapings of debt, favors are done daily for shareholders, employees and anybody else who can bask in the warmth given off by the fabulous glow of rented money.
At times, almost by accident, humanity itself can be nominally served.
Unfortunately, negative externalities are accrued, often taken out of the hide of the planet and leaving permanent scars.
Obligations that extend from generation to generation are assumed under current laws that ever more sternly protect the lender, the owner of the property that is the value of the loan.
Debt underwrote Venetian trade in the Middle Ages that powered the Renaissance and carried the industrial revolution into the dot.com stratosphere and out of the boom’s brief bust and beyond into the glittery cobweb we call globalization.
I’ll give you one more statistic, from the website of Hoffman Brinker, a debt counselor who has put together quite a page of frightening numbers. The page quotes Dan Seymour, a business writer from the Associated Press:
“According to a recent survey conducted by the National Association for Business Economics, the combined threat of subprime loan defaults and excessive indebtedness has overtaken terrorism and the Middle East as the biggest short-term threat to the U.S. economy. Of the survey participants, 32 percent cited loan defaults and excessive debt as the biggest threat, compared to only 20 percent citing terrorism as the biggest threat,” he wrote.
Is there an out?
In the Bible, the book of Leviticus describes a conversation on Mount Sinai when the Lord commanded Moses that when he got to the promised land to forgive debt every seven years. In the 50th year, the year after seven sevens of years, he was instructed to have a jubilee year, when “you shall proclaim liberty throughout the land to all its inhabitants.”
And “you shall return, every one of you, to your property and every one of you to your family.”
How much worse could it be than doing nothing?
With all due respect, this radical God sounds a little impractical and the promised land looks far.
But does anybody have a better idea?
E-mail Roger Snodgrass at firstname.lastname@example.org.