Working backwards from David Brooks' column "The Culture of Debt" led to Gretchen Morgenson's front page article in this past Sunday's New York Times titled: "Given a Shovel, Americans Dig Deeper Into Debt"
Just two generations ago, America was a nation of mostly thrifty people living within their means, even setting money aside for unforeseen expenses.Only a couple paragraphs into the article, it's soup kitchen time and "Sixteen Tons":
Today, Americans carry $2.56 trillion in consumer debt, up 22 percent since 2000 alone, according to the Federal Reserve Board. The average household's credit card debt is $8,565, up almost 15 percent from 2000.
While the circumstances surrounding these downfalls vary, one element is identical: the lucrative lending practices of America's merchants of debt have led millions of Americans - young and old, native and immigrant, affluent and poor - to the brink. More and more, Americans can identify with miners of old: in debt to the company store with little chance of paying up.The main difference being that instead of owing your soul to the company store for a loaf of bread, Americans can't stay off EBay. Of course, no story of woe and betidings would be complete without some down-on-the-luck tale of a woman who has been brought low by the "merchants of debt":
Earning a livable wage at Verizon Yellow Pages, Ms. McLeod finally decided to leave her marriage and buy a home of her own in February 2003. The cost was $135,000, and her mortgage required no down payment because her credit history was good.Danger, danger, Will Robinson!
"I was very proud of myself when I bought the house," Ms. McLeod explained. "I thought I would live here till I died." Adding to her burden, however, was about $25,000 in credit card debt she had brought from her marriage.So she purchased a home with no money down, carrying with her 25-large in credit card bills. Those unscrupulous lenders! Then illness hit and our subject re-assessed her life and financial situation. Just kidding:
She made matters worse during her recovery, while watching home shopping channels. "Eight weeks in bed by yourself is very dangerous when you have a TV and credit card," Ms. McLeod said. "QVC was my friend."Unscrupulous vendors, selling stuff! Take a look at poor Ms. McLeod on the NY Times site: she owes over a quarter-million dollars ($237,000 mortgage plus $34,000 in credit card debts) yet she's sitting outside her home smoking a cigarette, jewelry on both arms, while a Starbucks coffee drink sits nearby. Meanwhile, personal responsibility has curled up under the porch to die.