The Great American Debt Culture
The Real Drivers behind the Great American Debt Culture
You only have to watch the TV, listen to the radio or read a newspaper for 10 minutes and you will more than likely have been subjected to “American Debt Culture”. It pervades everything, encouraging us to take advantage of its “great offers” and “wonderful dream”.
The current level of perpetual unsecured Consumer debt is around $7000.00 for every adult person in the USA. That amounts to a total of at least $840 billion; in itself not a small amount. The meaning of perpetual debt is only minimum payments are being made every month, and the actual debt itself really never reduces. The interest payments on this debt amount to $159 billon every year, and increases at the rate of 5% every year. Those in the debt culture are literally being eaten alive. And remember, the above includes only unsecured debt. Add in mortgages and other secured loans and the figures really “take off”.
What happened to the original American Dream was fuel by sound values, common sense, honesty and hard work? Those who formed the US into a world leading nation did so without offers of endless credit and owning the latest trinkets. The truth is, living under a debt culture actually makes people poorer and traps them into the bargain.
Imagine for a minute you have no debt; Zero; Nada. There are no credit card payment, no loans, and no mortgage. You owe nothing to anyone. How much more money would be in your pocket every month? With that freed up as disposable income, how much could you amass in 6 months? It may be surprising for you to learn, but being completely debt free is completely possible, in a shorter time than you realize, with just the money you currently earn. All it takes is focus and getting out from under the pervading “debt culture” that created you as a debtor in the first place.
So, what are these drivers that seduce people into the downward spiral of “debt culture”?
The first is lack of sufficient financial education. The basic fact is that almost no school or collage in the US, with some small exceptions, teaches the basic fact: “Don’t spend money you don’t have”. In fact, most colleges encourage the culture of “education now, pay later”, pushing student loans and other instruments onto students who know no better then to blindly accept them. I was told of a high ranking college professor of finance who had an unsecured debt load of $150,000.00, plus a large mortgage. This is not the best example for an educator to set, take it from me.
The second is the media. It is in the media’s best interest to keep you buying. They are funded from advertisers, so it does not take a degree in nuclear physics to work out that they do everything in their power to get you hooked on the debt culture. This starts from a very early age. From the time they can understand words, children are bombarded by the media as to what is the next cool thing to have. By the time they reach the pre-teens, they have developed very sophisticated techniques to get their parents and other family members to satisfy the cravings the continuous media projections create. The media has created a self perpetuating culture, several generations having been subjected to this “programming”. One of the more disturbing side effects of this is the number of people who are addicted to spending. To them it is a drug more powerful than cocaine. They just cannot stop.
The third is peer pressure. When everyone is doing it, the sheer amount of projections on you to do the same is staggering. There are so many unspoken, tacit agreements and secret consequences if you don’t go along with the crowd that most people are scared to death to even perceive of doing something different. Even employers use the result of this pressure to keep their employees in line. Who can afford not to “toe the line” at work if they carry a large debt load? The real truth is that 95% of us are habitually doing the wrong actions most of the time by following what everyone else does. One of the secrets of being successful in business is to never follow the crowd or the current “group think”. Most of the most successful investors completely shun conventional thinking. In fact they do the exact opposite!
The forth driver is what I call “a lack of inspiration through dissatisfaction”. If you get everything you want just by asking for it, you are never inspired to get into action to get it yourself. Too many parents are too busy to really coach their children or their friends on this powerful ability. The positive side of this is once this ability is acquired, it immediately makes an enormous difference in the way an individual approaches life. Compulsive spenders suddenly stop spending, get into action of making money and pay off enormous sums in almost no time. It is amazing just how creative a person can be if they are inspired by a big enough dream.
The fifth is lack of workable processes. Most individuals operate on a “wing and a prayer”, and shun defining the processes in their lives. They never recognize what a successful action is because they so rarely have any defined success measures and, even if they have, never use them. “You are doing what you are doing when you are doing it”, a completely self evident fact, but often fully ignored. I understand the definition of insanity is to continue to perform the same action and expect a different outcome. All I can say is there some behavior I have witnessed could definitely be described as “wacky”!
The truth here is that these are only four of the factors at play. The net result of all the influences is that many, many people are in a trance state most of the time, totally subservient to the continuous projections they receive. For some the trance is so deep and habitual it takes a huge amount of skill to spot it and break them out of it.
So, what to do about this?
There are many quick fixes around that provide short-term cures to all the above. Some work better than others. However, the real trick here is the raise an individual’s awareness to the point where they spot all the projections and fixed agreements they have been operating on. Once this level of awareness has been attained, the person will almost immediately seek to be educated in the area are of finances and work toward mastery of it. From there it is a plain sailing to reach the state of owing nothing to anyone.
Author:Malcolm
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