Good news and bad news about debt

When you go to get your hair done, and the topic of conversation with the hairdresser is mostly about the economy instead of the usual kids, work and Britney… you know something’s up. This conversation took the form of us openly wondering if people we know really “have the money” for the homes they’ve been buying, vacations they’ve been taking, etc. “People we know” meaning vague generalizations like “my former neighbor,” “my brother-in-law’s niece in Poughkeepsie, etc” – the gossip was not really that juicy, and more concerned than catty (“I hope they didn’t get one of those funny loans.”) But your hairdresser, discreet as she may be, does know for sure which parts of town have clients who seem to be newly “house-poor” and which parts don’t.

This conversation – no doubt going on in salons all over America – represents a kind of breakthrough in the collective psychology of the consumer. I don’t want to extrapolate too much from it, but perhaps it’s a sort of crack in the foundation of the current American attitude toward debt-as-lifestyle. It used to be that Americans never accepted large debt as going hand-in-hand with a high standard of living – it made Americans uncomfortable to carry too much of it, and they aspired to be “free and clear,” not just having cash on hand to spend. That view has changed. In a way, our apparently high standard of living is based on us not questioning even our friends and neighbors, much less our political or financial institutions. What’s spooking the financial community today isn’t just the “credit crunch,” but the lack of hard information about risk, the confidence that is the bedrock of our financial system. Now, everyone is questioning.

Most people have some degree of school, auto, or credit card debt, and usually a mortgage — so the problem isn’t debt itself, but the increased reliance on it. Some (many?) Americans threw themselves into the accelerated debt-fueled lifestyle, many felt they had no choice, while others have been more reluctant to. Some of that attitude has to do with what Grandpa used to do. But it hasn’t been psychologically easy to be less-indebted over the last decade. If you somehow kept your debts managed in the more conservative style of, say, 20 years ago, you’ve been assaulted with the message that you’re not sharing in today’s prosperity. Since no one really talked seriously about the essential wrongheadedness of basing a way of life on increasing debt, you might have internalized this message, whether or not you acquiesced to it.

Now that more and more people are openly admitting their feelings that a lot of the apparent material prosperity enjoyed in this country over the last decade (or more) doesn’t quite make sense. SUV’s and Hummers don’t make sense as daily-use vehicles; the housing bubble didn’t make sense; the constant updating of the iPod with minor tweaks, with the expectation you’d buy a new one every year, didn’t make sense; the overweening confidence about running twin wars in Iraq and Afghanistan didn’t make sense. My God, what else doesn’t make sense? “A few questions here, a few questions there — pretty soon you’re talking real understanding.” More than just a housing bubble has popped.

So that’s the good news: You no longer have to try so hard to make sense of that stuff. Feel free to ask questions openly of your friends and neighbors, of your government and your bank, to make things more clear.

Now for the bad news… below the flip, to save space:

The bad news: The minute you take yourself off the debt train, you become more vulnerable in other ways. In some ways, you become weaker. Because you refuse to go into debt, you aren’t going to have fashionable clothes, new hairstyles, or a car that says “I’m with it.” A common response is “So what? My values are higher than that,” but I fear that one can overestimate one’s personal capacity for standing up to a prevailing value system, particularly if one has never tried it before. No, the rest of the world won’t stand there and hoot at you; it just… goes on, and you’re left to watch it continue. And wonder if you can’t, after all, afford that new coat or that new car… (parents can fill in the rest…)

More insidiously than that, because our economy and social systems now run much more on indebtedness, people who have jumped off the debt train sometimes find that they have lost some critical tools for staying solvent. A sad lesson that some people learn is that, well, there’s always someone coming up behind you who will play the game and who is younger and shinier than you (and probably more debt-linked). If you are unable or unwilling to go into more debt, it’s sometimes very difficult to finance the things which you once thought were “little things,” but are “big” things in the context of not just impressing, but even remaining visible to people who are still living indebtedly. (And you still have to share the planet with them.) And the choo-choo train that is the debt-system, is relentless. The longer you remain in a low-status job, the longer you choose not to borrow more in order to buy into the system (such as, going back to school for a new degree, or blowing a lot of money on a new wardrobe), the more you will have to look sharp for your own interests and speak up in your defense. And that doesn’t come naturally to a lot of people. (There’s a reason why people join communes.)

In short, it’s not about how to become debt-free. (And some debt, like going back to school, can be a smart choice under certain circumstances.) It’s about learning to live more deliberately and less indebtedly in a world which, despite your best hopes, is not going to see any truly major transformations, barring the Second Coming. The debt train is not going to grind to a halt simply because you, your family and a few of your like-minded compatriots have jumped off. Not only will the world not be impressed by your wanting to grow vegetables in your back yard, but it may also eventually think your back yard is not being used wisely for “growth” and will see it as an empty space. And you as… well, as not being there at all. (See: Americans, Native.)

What this boils down to is this: One can’t just simply drop out. There will come a time when one has to defend one’s choices, at the very least; and defending one’s choice to live debt-free will sometimes mean participating in conflict. The “other” way of life one tries to escape will not stop bearing down. One can occasionally hunker down and hide, but not always. That’s not to say one has to be in constant vigilance or a state of war, but rather being wise, and not in denial, about what the other forces want. In other words, the right to grow vegetables in one’s back yard has to be also fought for politically — whatever form future politics may take.

Where the presidential election is concerned, I don’t see a lot of difference between the candidates. But I would put lesser weight on any candidate who talks a lot about “change” and speaks little or none about “struggle.” A candidate speaking about the economic and spiritual importance of aspiring to be free and clear, without sounding like a two-bit cult leader, would be good news indeed.

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