Usury, the drug of a nation.
The acceptance is debt as a cure-all of tough financial decision is a nightmare.
Yes, the title is a play on the classic hip-hop track Television, A Drug of a Nation. It seemed fitting…
First a definition of usury:
Do policymakers understand what usury means? Absolutely yes. Why? It is yet another part of Leviticus that Christian Nationalists purposely don’t read:
Leviticus 25:36-37 New King James Version (NKJV): Take no usury or interest from him; but fear your God, that your brother may live with you. You shall not lend him your money for usury, nor lend him your food at a profit.
America loves usury. America simply adores creating a debt slave. It has to be one of our most favorite policies, even though some claim we are a Christian Nation. Usury is a big sin in all Abrahamic faiths regardless if you read the Bible, the Torah, or the Koran. An established sin of making your fellow man a debt slave is common practice and has been throughout the history of the country. Debtor’s prison is making a comeback with 44 states authorizing arrest warrants over debts owed. Especially in the post-Conservative [read: Corporatist] Revolution (1978-present) phase of America, it is our go-to policy notwithstanding the long-term harm presented to a person, a family, a muni, or the country itself.
Today, SCOTUS is hearing whether or not President Biden's student loan debt relief is permissible, ergo constitutional. My bet is SCOTUS will gleefully throw out all debt relief for one simple reason: The debt relief is aimed majoritively at regular working-class folks, not banks, the Sackler family [opioids], or billionaire campaign donors. The trillions upon trillions in bank bailouts of 2008 were perfectly fine and went unchallenged. Why? The welfare-for-wealthy is acceptable, subsidization is an upstream process, not downstream to the lowly plebeian dregs. When you try to protect the middle class with a subsidy or a relief measure, it will only be described as a power grab. The Heroes Act statute allows or grants authority during a national emergency to modify the student loan program, but statutes be damned - oligarchic ideology must be protected at all costs. A tax credit to a company street-dealing opioids is great, trillion upon trillions going to bank bailouts and free money windows are “necessary to protect the financial system”, and the carried-interest loophole for wealthy property developers is blah-blah-good-thing-blah-blah. It’s bullshit. Especially when they rigged student loans into a never-ending $1,600,000,000,000 debt trap! There are student loans from the 1970s that people can’t pay off!!
Americans have been gladhanded a series of despicable forms of bad credit that has morphed into near-systemic usury. 110% or more credit cards, 10-year car notes, negatively amortizing mortgages, payday loans, and student loans. All while banks, hedge funds, and large corporations have had more than a decade-long access to free money windows at the Fed and the Treasury. The banks got money from the taxpayers at or near zero percent interest, you get usury with no limit to the interest rate. Think about that for a minute.
What are the problems with high debt and usury?
Debt is outpacing savings, again.
Payday loans are not some sleazy jewelry store/pawn shop, they are the big banks now. Yes, the same banks we bailed out in 2008 are slinging 400% payday loans now. They know the problem they created as they seemingly agree somewhat with Uncle Bernie (Sanders) that an interest rate cap (36%) may be in order to limit payday usury. At 36%, the big banks can still operate as predatory lenders, but the pawn shop would be locked out of the debt market. See how regulation really works folks! Note: Uncle Bernie wants a reported 18% interest cap (read: that would put a crashing halt to payday loans overnight).
We have created a super-massive pool of student loan debtors: Federal student loans make up the vast majority of American education debt—about 92% of all outstanding student loans is federal debt. The federal student loan portfolio currently totals more than $1.6 trillion, owed by about 43 million borrowers. Seemingly, the Department of Education (that was created in 1979, no DoEd fans, it is NOT in the constitution) was established with only two purposes: create debt slaves instead of educating the populous and teach for the test (read: not actually learning or developing critical thinking skills). Maybe it is time to send the function of the DoEd back to the House Education Committee and the State Legislators. Not as a pandering white grievance as redneck-without-a-clue Lauren Boebert suggested, but as a functional response to the dysfunctional problems DoEd has produced since its historically recent creation. I want education and education funding to work properly, I am super-pro education, but Boebert simply has an axe to grind about how the schools, universities, et al are woke (read: the Nationalist excuse for every complaint, no data or even an actual point is required…).
Car loans, in addition to the massive price spikes during the pandemic, have quickly turned into a disaster with the most drivers behind on their payments since 2010. I have been watching a YouTube channel where they talk about car loan payments. The size of the car loan payments is certainly a problem as the average payments hovering around $700/month and an unforeseen number of drivers take on $1000/month or more payments. That is as unaffordable as it is stupid. The evidence is already present: repossessions are hitting all-time highs.
Household debt is a problem as well. OECD’s data shows Americans have a debt load of 101% of disposable income.
The only time in recent history when Americans’ savings rose significantly was during the pandemic lockdowns. Seriously, it took locking everyone inside their homes to see a noteworthy increase in household savings. Substantial household savings increases only occur when people are literally prevented from spending due to lockdowns and supply chain meltdowns. Again, think about this for a moment (and try not to get frustrated).
OECD: Household savings forecast, % of household disposable income,
Q1 2005 – Q4 2024
Remember, since the dawn of Reaganism, we have been berated with the mantra of Family Values. Yet many of the policies enacted in this country are literally anti-nuclear-family. Debt/poverty (and the resulting stress) can destroy a relationship and break down the family unit. I know that from responding to my fair share of domestic disturbances where couples often fought (yes, at times, physically) over money troubles. According to an IDFA survey of certified divorce financial analysts, money was the 3rd highest noted cause of divorce in America. High taxes and high debt loads I am sure more than doubles the anxieties over family money management.
Then you have the public debt, eek! As of Feb 10, 2023, the national debt rose to a whopping $31.38T (yes, trillion with a T) with only $25M (yes, million) in reserve borrowing capacity. That’s a bleak debt picture. A debt load that has every American roughly owning an apportioned $84,000. That’s $84K atop your average $37,574 of student loans, your average $42K car note ($1.43T in total car notes outstanding Dec 2022 - LendingTree), and the average $6.6K of credit card debt.
Oh, and by the way, on average your muni is functionally bankrupt, so is your school district, your county, your (name a muni function - water, sewage, etc.) district, and about half the states are so buried in debt there is little hope of achieving solvency in the next few generations of taxpayers. That is how addicted our society is to forever debt. During the pandemic-caused recession of 2020, when federal debt spiked to an all-time high of 134.8% of the GDP. For every dollar of gross domestic product, we created ~$1.34 in debt. That’s horrifying.
If you are playing the hidden ace card of the Left-Right Orthodoxy and want to blame either blue states or red states? Nonsense! Debt is freakin’ everywhere! The data is quite clear on that point. Governors can point fingers at each other all they want, the debt is only mildly better in some states. Mildly better than the total debt shitshow that is the norm.
The total debt layered on top of our society is a real problem as the planet heads into a period of deglobalization. The global economy (and the underlying security it secured or produced) which we have had in place since the 1950s is over. The changes to rehome manufacturing and update supply chains will be a rough road hampered by inflation and the lack of free liquidity (maybe think of it as free cash flow, or using available cash, not debt, to pay ongoing operations) caused by the overall debt. America has really put itself behind the proverbial eight ball with the construct of debt as an economic driver. Just when we need enormous capital to massively rejigger the economy, our debt is peaking.
Brace yourselves, America. We are in for a rough road ahead. I foresee a $40T debt limit debate soon and if we are not sensible, a rash of both private and public defaults on trillions in debt paper. It is dangerous because more debt is the only way we are going to finance the changes required in the future post-Ukraine War, post-China cranky over Taiwan, et al deglobalization. Unfortunately, rough seas and more debt are the near-term outlooks.
How critical is the total debt problem? One of the biggest and growing debt categories is medical debt. 23M Americans have medical debt and of those debtors, 3M have unpaid medical bills totaling more than $10,000. Black folks have nearly twice the debt as whites and Hispanics. 9% of the people with medical debt have health insurance. Every American should realize that medical debt is a leading cause of bankruptcy.
Yes, in America, you can’t even go to the car dealership, the store, or your own family physician without risking more and more debt. Usury is the drug of a nation.