Debt = Serfdom

[celtic_crippler]

A very fascinating article from author Charles Hugh Smith:
http://charleshughsmith.blogspot.com/2013/04/debt-serfdom.html

I encourage you to read the entire article (the quotes below are but a few excerpts.) He makes some pretty valid points and may change how you view financial institutions and/or your status as a “free” citizen.

Are you free, or have the pasts’ “chains” of serfdom been replaced by “student loans” and a “mortgage”?

Let's be clear about three things:

1. Too Big to Fail financialization is the metastasizing cancer that has crippled democracy and capitalism.

2. Financialization feeds on expanding debt and cannot survive without it.

3. Debt is serfdom.

Agree? Disagree?

There are three key dynamics to debt-serfdom:

A. The serf is never free of debt, i.e. he/she is programmed to being indebted for life.

B. Most of the serf's income is devoted to servicing debt.

C. Most of the debt is unproductive: marginal-utility college education, needless auto loan, leveraged McMansion that loses value in the inevitable speculative bust, and so on.

There are many ways to state these fundamentals and shelf-loads of books have been written to describe the many mechanisms of financialization and serfdom, but we can summarize the dynamics in a few additional points:

• Financialization requires a corruptible, highly centralized State that enables the extreme concentration of financial assets and power.
• This creates a feedback loop where the Financial Powers need the Central State to encourage debt, which is the lifeblood of financialization.
• The Federal Reserve is the "ultimate power" in this financial universe.
• The Fed does not care about the "little people" hurt in a depression

After reading the article and thinking about it, do you still feel “free”?

 

[Sukerkin]

Quite agree.

Debt = serfdom. There is another way to live, frugally, with only short-term debts that are paid off in a few short years. We either accept the consumerist-narcissist debt-serf programming or reject it. We are neither victims nor bystanders. The choice is ours.

The system has me with a mortgage but that is it for I chose the frugal life - altho' at present it seems that I have been a fool as all those with enormous personal debt have had the 'use' of the borrowed money and are not really having to pay any price for it. Whilst I, who have saved all my working life whatever I could, have seen my savings devalue with inflation being higher than interest paid and have had to use my savings to keep us going during the time of crisis that in the end took my wife away from me (because I had saved for a rainy day, I was not entitled to any assistance when that rainy day arrived).

 

[celtic_crippler]

- altho' at present it seems that I have been a fool as all those with enormous personal debt have had the 'use' of the borrowed money and are not really having to pay any price for it.

Oh... they'll "pay" eventually. Unfortunately, we'll have to "pay" right along with them.

 

[arnisador]

The system has me with a mortgage but that is it for I chose the frugal life

Mortgages (and, over here, student loans) are generally "good debt", although not necessarily in the present economy. Similarly for starting a (successful) business. Avoiding unnecessary debt is good but borrowing capital can also be smart.

 

[Sukerkin]

Aye, I agree - it's all a matter of using debt productively to advance yourself whilst still servicing and removing that debt.

 

[jezr74]

Nice to see you haven't compared this to gun control

Good article, I think this is is very applicable to America, the cost of education is incredible. I can see why educational institutions are being sued these days. So they should be, they are inflating costs, creating a discriminate elitism environment. They reap what they sow.

But I agree with Arno too, mortgage within your capability is good debt.



Sent from my Nexus 7 using Tapatalk HD

 

[elder999]

There was a time when student loans made sense; sometimes, they still do....for the time being, a mortgage is good debt-they'll likely take away the interest deduction in the next ten years, though, and then it might not be so attractive.....consumer debt, on the other hand, is generally self-indulgent.....having a "mortgage" to purchase a car is ludicrous (though using your home equity to finance a car might be seen as equally ludicrous, it is far less costly).....is "debt," serfdom, though? I like the analogy, but doubt the real accuracy of it-given the nature of bankruptcy, bargaining down debt, and the myriad other options for simply walking away from it, as well as the very real fact that people have taken risks with debt and built very large fortunes, ala Robert Rodriguez, who financed his first film, el Mariachi by maxing out a bunch of credit cards, and made his name, a fortune, and established a film franchise with Antonio Banderas, and another with his friend Quentin Tarantino-there are lots of stories like his......"debt" might be "serfdom" if you can't pay it all back, I suppose, but you shouldn't take on debt that you don't think you can pay, and hardly anyone ever does-the real key is knowing that you can.

 

[Carol]

My mortgage doesn't feel like serfdom, but I intentionally bought small. Its not very glamorous having a tiny garden-style condo instead of a nice townhouse or a single family home, but when life decided to through a few bad things my way, it meant I could ride out the rough stuff and keep going without a serious threat to my home.

 

[celtic_crippler]

......"debt" might be "serfdom" if you can't pay it all back, I suppose, but you shouldn't take on debt that you don't think you can pay, and hardly anyone ever does-the real key is knowing that you can.

I think that was part of the primary point the author was attempting to make.

Just getting into college will find one's mailbox inundated with credit card offers. And, many students take advantage of these offers getting in way over their heads and they never stop this type of lifestyle even after college, even when they now have the added expense of paying back the student loan.

They just keep perpetuating their debt, getting deeper and deeper until they're looking at so much debt that they may never get out of it short of bankrupcy (and those laws have changed and are likely to change further.)

The other point made was that banks benefit from the amount of debt they take on, which encourages them to make these types of offers creating a "feedback loop."

But to reiterate what you and the author say, living within one's means is the key to not being a serf.

Does anyone know if they still teach Economics in school any more? It's been a while since I was in High School. LOL

 

[Sukerkin]

They didn't below the age if sixteen when I was at my school. I took 'A' level Economics in Sixth Form and loved it so much I took my first Honours degree in it . I was good at 'trading' and thought that's what I would do for a living ... until I tried it for real. Soon decided it was not for me :lol:.

 

[jezr74]

The other point made was that banks benefit from the amount of debt they take on, which encourages them to make these types of offers creating a "feedback loop."

This makes me so angry that banks have no duty of care, and the regulators are effing useless to enforce any of the measly checks to try and stop this happening.

Does anyone know if they still teach Economics in school any more? It's been a while since I was in High School. LOL

They really need to start teaching a class's on money sensibility.. times have changed, even I find it hard to keep the sense of value of money these days as we have moved into a time of cashless society. The Wife and I trialed 6 months of taking physical cash out at the start of each week vs just using the cards for budgeting Having the cold hard cash made me think twice before any purchases, and stopped me making any impulse purchasing.

Kids don't get that feel these days, it's all magical credit that comes from a plastic card. (which banks just want to throw at them)

 

[Cirdan]

I will probably never understand it, why do people need all those big McMansions, huge status-symbol cars and several luxury vacations a year? All seem to agree it is what is important and you should spend your life paying the resulting cost/debt.

"These people, it's no mystery where they come from. You sharpen the human appetite to the point where it could split atoms with its desire, you build egos the size of cathedrals, fiberopticly connect the world to every-eager-impulse, grease even the dullest dreams with these dollar-green gold-played fantasies until every human becomes an aspiring emperor! Becomes his own God! Where can you go from there? And as for scrambling from one deal to the next, who's got his eye on the planet? As the air thickens, the water sours, even the bees honey takes on the metallic taste of radioactivity--and it just keeps coming! And it just keeps coming! Faster and faster! There's no chance to think, to prepare, it's `buy futures, sell futures' when there is no future!! We've got a runaway train, boy!! We've got a billion Eddie Barzoons all jogging into the future. Every one of them reading to fist-**** God's ex-planet, lick their fingers clean as they reach out with their pristine cybernetic keyboards to total up their billable hours!! And then it hits home! It's a little late in the game to buy out now!! Your belly's too full, your dick is sore, your eyes are bloodshot, and you're screaming for someone to help!! But guess what? There's no one there!! You're all alone, Eddie!!"

 

[zDom]

Agree.

Banks didn't really want to loan me any money for my mortgage. Even though I have paid off one mortgage and several car loans already, I don't regularly participate in debt, so it means nothing. If they don't see you as a regular in their casino, they don't think you are worth the time.

I've always wondered why I couldn't get a car loan for a $40,000 house. I mean, isn't the house a more reliable asset to seize than an automobile which loses value as soon as you drive it off the lot?