Posted by Tim Stobbs on May 25, 2009
I finished watching a show last night called I.O.U.S.A. on CBC which had the general message of the USA is up to it’s eyeballs and drowning in debt. What I found interesting about the amount of the US national debt at the time of the movie was $8.7 trillion dollars. Yet when you added in all the other liabilities like unfunded Social Security and Medicare the total ballooned to $53 trillion dollars.
WOW! That’s one hell of a mortgage for a country to have. So I began to wonder is a country and its citizens sort of like parents teaching their kids. Is the fact that our governments are so used to being in debt setting the stage for us to all be a bit too overly comfortable with debt?
For example, do you know anyone who is completely debt free? No mortgage, no line of credit, no nothing. I personally began to think about this and realize I can only think of one person I know. I image you would have a similar experience, that you could likely not list ten people you know who are completely debt free. So on an informal basis we are all in debt for the most part, is that a good thing for a country to have? We all have debt so it must be alright, right?
If this familiarity with debt causing us to have unrealistic expectations in our lives? Have you seen some of the condos and housing people are calling ‘starter homes’ in ads today? My current house isn’t that nice. Then it just goes on and on. People buy new cars right after getting their first job, does that even make sense when you already owe $10,000’s of dollars in debt from your education? We look everywhere and see nice things other people have all paid for with debt and don’t realize that it is a false illusion of wealth.
Is one of the major issues we have collectively that we are too used to being in debt? Do we need to collectively start pressuring each other and our governments to be more responsible with debt? Should keeping up with everyone else mean not having a credit card balance and a modest mortgage? It would be an interesting place to live where not having debt was more of a sign of status than what you drive or where you live. Unfortunately, being debt free is hardly sexy with living in a smaller home and driving an used car so the marketing is going to be difficult to convince people to change.
Am I overly comfortable with debt? Yes, I would say I am. I don’t freak out that owe $135,000 dollars to the bank for my house, but in reality that is a huge amount of money to be owing. I also don’t mind using the line of credit once in a while. So how about you? Are you too comfortable with debt or not?