Trump’s Trade War: Long-Term Thinking in a Short-Term Age

Trade is one of the key differentiators Trump was able to capitalize on to stand out in the 2016 election. Now at the helm of America’s trade regime, he has enacted tariffs he spoke about on the campaign trail, probably the most significant of which being those on foreign steel and aluminum, which aside from their domestic economic benefit in the form of employment, hold national security value as well.

 

Of course, Washington Swamp creatures, Never-Trumpers, and many liberals who knew zero about international trade until last year, have relentlessly accosted the president over his trade decisions, including doom-and-gloom prognostications of price hikes due a trade war with China. To these, Trump blithely responds that we already lost the trade war with China years ago and he’s merely trying to dig us out of the rubble.

 

In a perfect world, there would be no tariffs. Trump actually reached an agreement with the EU recently stating that our mutual goal is zero tariffs. I doubt that will happen, but it shows that Trump understands that it’s better for no one to have tariffs than for tariffs to exist for only one side. The problem is, most nations do have tariffs, and some have higher tariffs than others. We also do more business with some nations than others. If no other nations had tariffs, we wouldn’t need any either; in fact, we would look like the Global Bad Guy if we did.

 

But other countries with whom we do business charge us higher tariffs than we charge them. This is obviously an imbalanced situation. Trump is trying to bring balance to a problem that no previous administration was willing to tackle but instead kicked down the road until it landed in his lap. Rather than deal with the problem when it was a smaller problem, previous administrations and Congresses accepted a lying-down, defeated position before large, tariff-happy economies like China, Japan, and Europe. We didn’t hit back with enough tariffs of our own, and prices settled. The subject of tariffs faded from public memory, and voila, we had the “new economic normal.”

 

Our “normal” is, in fact, a position of weakness. If the health of our economy is built on economic capitulation to China and other countries, we don’t have much of an economy. We’re more like a tribute-paying state, willingly giving away money to maintain the status quo. That’s like an economy being held for ransom. And a lot of American liberals seem to have Stockholm Syndrome.

 

The key is that in order to get back to a place of even footing with other countries like China, course correction is required, and course correction always causes some level of pain.

 

This is the idea that overnight-trade-expert liberals and Washington Swamp Creatures can’t seem to grasp. It’s similar to what gets said about Social Security and Medicare’s ballooning price tags every election cycle. No one wants to bite the bullet now, so we kick the can down the road…to our kids’ generation. Well, when it comes to trade, Trump has decided it’s time to actually bite a bullet for a change instead of kicking the can down the road even longer. He’s read about and seen devastation of our economy for decades, and he’s had enough. Now for the average American, it’s true that biting the bullet might mean a little pain in the form of higher prices. Personally, I don’t think it will be anything nearly as bad as the doomsayers (who generally hate Trump and want to make him look bad) predict. China exports to us far, far more than they import from us, which means they need us more than we need them, which means we hold most of the cards. In a dollar-for-dollar trade war, Xi Jinping’s government knows it cannot win. But give it a couple more decades and it could, and that’s something Trump is trying to head off.

 

It kills me though that rich Swamp elites can endlessly bemoan the specter of a slight increase in prices at the grocery store, the mall, or the Apple store. Big deal! We are helping ourselves in the long run by actually dealing with this problem, no longer choosing to let it nickle-and-dime the country for the rest of our lives. Of course, the average Swamp Creature doesn’t care about Trump’s working-class base, who stand to gain the most from a rectified trade situation. They don’t care if those who aren’t as well off benefit in the long run with jobs. The Swamp Creatures are more concerned about any potential tiny pinprick to their own personal budgets. I feel this is an issue that we need a slight dose of collectivism on—commitment to our fellow countrymen. Their fates being inextricably tied to an ever-enlarging central government, Swamp Creatures can never be relied on to put the needs of the population before their own—that’s how they reached the high perch of Swamp Creature in the first place.

 

The trade issue is a lesson for a much larger problem, already mentioned—social entitlement programs. I’m not saying we should bite all the bullets at once, but once we’ve bitten and swallowed the trade bullet, learning that it didn’t kill us as everyone said it would, perhaps then it’s time to bite one of the entitlement bullets. The unwillingness of Swamp elites to let Trump make us bite the trade bullet and get it over with, thereby ensuring it will be an even bigger bullet years from now for our kids, is exactly the kind of thinking that everyone before us exercised and which produced the trade bullet in the first place. There wouldn’t have been a trade bullet to bite if past administrations and Congresses had retaliated with tariffs and not loved good economic numbers to get re-elected on more than the long-term economic health of the country.

 

But that’s what politicians are best at—selling short-term happiness in order to get re-elected while obfuscating long-term pain.

 

If we don’t do something about entitlements, the next generation will curse us for not having the courage to bite the bullet and fix the problem before it got to them. It’s actually cowardly and hypocritical to punt these problems to our children, the same children we raise to believe that we will always have their best interest at heart.

How to Rule the World: A Guide for the “Elite”

Davos. Bildebergers. Council on Foreign Relations. Deep State. Trilateral Commission. All these are combinations on the same Punnet square—the “elite” rumored to secretly run the world. Most people have heard of at least one of these groups, and some people take it to another level with wild conspiracy theories. “The Elite” was a major theme of the 2016 election and continues to be a flashpoint in populist, nationalist, and conservative political campaigns everywhere. But whichever label you choose the use to describe the idea of secret overlords running everything with the average person having little or no say, they all seem to share the same mindset. I wanted to explore this mindset and make some educated guesses as to what motivates such people and why they are so successful in their designs. The best way to do this is to look inside your own human nature, something the elites have in common with the average person, and imagine how you would behave if you had practically unlimited wealth, vast global knowledge and connections, invulnerability to most laws, and, above all, the one thing that motivates the elite more than anything—the fear of losing what you have. What would you do if you were in such a position, with practically unlimited resources yet with everything to lose? The following is my best guess at how I would behave if I was the archetypal soulless, remorseless, arrogant elitist who believes that what I want is always correct and justified.

 

The elites run on money. Without it, they lose their friends and their position. So the first component to being in the elite is being very wealthy. Wealth brings friends (if even for the wrong reasons). Friends mean influence, a network, and eventually status. If your friends are also wealthy, you can benefit symbiotically from their influence and network as well. The more you benefit, the wealthier you become, gaining you more friends, status, and so on. There is a ceiling though—the “old money” elites who are much more established than you and for much longer. Rise high enough in the ranks, and you have to start being careful or they’ll swat you.

 

But imagine you break through the ceiling somehow and you’re in the elite of the elite. You can travel anywhere in the world you want. You have a personal bodyguard detail as well as friends in the police wherever you go. When you travel, you do so on private jets, private ships, private everything, putting you out of the reach of the average prole with his problems and tendency to behave unpredictably. Your mission is to eliminate all risks in your life except the ones you want present, such as risky investments.

 

You’re out of the reach of most laws and governments with your connections and access to the best lawyers. On top of that, through business contract patronage and philanthropy, you can control government officials and influential NGOs. Even if you got arrested for an obvious public offense, chances are you can buy your way out of the justice system in most countries, or your friends can talk to the higher-ups.

 

You influence politicians to pass laws favorable to your interests, which generally means laws that help you acquire or protect assets. This could be in the form of complex financial laws or laws that make life difficult for competitor businesses. For example, if your company can’t afford a private jet, you can advocate for legislation that restricts all businesses’ ability to use private jets, in order to level the playing field. Maybe the messaging used in the passage of such a law centers on environmental concerns.

 

As the elite, you are a globalist. This means you believe in the slow dissolution of borders, nation-states, the eradication of nationalism, and a worldwide central government that you, conveniently, will either be a part of or be in favor with. All these pesky nation-states of people fighting for their own interests injects way too much risk into your plans. So you generously fund whichever political armies promise to eliminate patriotic instincts. One way to do this is to fund and advocate expanded powers for international alliances like the United Nations, European Union, NATO, and so on. The stronger these international bodies are, the more they can bring the behavior of nation-states into line with what you as “the elite” know is the path to peace (and a larger balance sheet). Liberal international institutionalism is your favorite ice cream flavor.

 

The problem is, those annoying nation-states resist threats to their sovereignty. Fortunately, there are many tools available in the political arsenal to weaken the national resolve of a population. Enough immigration will create chaos and social dissolution. When the dust settles, you’ll have a population that can be easily ruled. Or, you can go after the most basic unit of society—the family—by promoting cohabitation, devaluing marriage, making divorce easy, promoting abnormal and dysfunctional sexual behaviors, and instituting relentless political correctness against those who cling to the classical definition of family. People without stable families have a harder time becoming educated, self-sufficient adults who can organize and resist you, or who can at least compete for wealth. You need to muck up society with mass social confusion to prevent such personalities from forming in the first place.

 

Or you can go even further and simply try to decrease the size of the population to something more manageable. You don’t want war, because that would lead to the destruction of assets that you own or could acquire. Instead, stop the population from growing and then wait out the demographic downturn, especially since automation means fewer people will be needed to power the economy. Reduce population growth by promoting abortion and by promoting feminism, which drives a wedge between the sexes, thereby preventing procreation in long-term unions capable of raising functional adults. Of course, contraception is also a prominent weapon and must be ubiquitous in order to prevent births in the first place. Promote promiscuity and pornography so that humanity’s sexual urges are misfired in directions unproductive for the growth of a healthy, intelligent, well-adjusted population who would, again, be capable of resisting you. Of course, any religious institutions that defy these tactics need to be brought down to size. Use the media to give them a negative image (more on media influence later), especially among impressionable youth.

 

Note that these strategies should only be employed against countries that are causing you problems. The countries that produce the immigration waves needed to overwhelm the countries you are trying to dissolve or depress—don’t use these social tactics against them. You need them to keep cranking out large populations so that there are enough people to immigrate to the target countries. If, at some point, those nations also become a threat to your plans, you can simply pivot your laser beam of social chaos to them instead (or as well, depending on your funds). These tactics are guaranteed to succeed if allowed time to work.

 

Another thing you need to do, obviously, is disarm any population that could organize a resistance movement against global control, or against whichever country or group you are trying to use to supress the target population. Make it so that governments have a monopoly on weaponry (except for your own security detail and mercenaries around the world whom you can hire).

 

America in particular is the most difficult pocket of resistance to your globalist, elite ambitions. Americans stubbornly cling to their Bill of Rights, annoyingly protecting them from:

  • Attacks on the religious institutions you are trying to defeat in order to muck up the social gears of society (1st Amendment)
  • Attacks on their right to free speech, which allows the resistance to get their message out, draw media attention, and organize (1st Amendment)
  • Attacks on their ability to assemble freely, with which they can mount effective, public defenses before a watching world (1st Amendment)
  • Attacks on their right to defend themselves with arms (2nd Amendment)
  • Attacks on their freedom from exactly the kind of surveillance you need in order to preempt their activities (4th Amendment)
  • Attacks that corrupt their justice system, allowing it to be used by the “highest bidder” (5th Amendment)
  • Attacks on individual states’ ability to defy the central government (10th Amendment)

And many others. America’s Constitution is unique and is the political code that obstructs your goals more than anything else in government. You will never be able to rule the world unless you can get rid of America’s Constitution.

 

You also need loose governmental control of the global economy. Without it, the markets are too prone to fluctuation and your investments are at greater risk. Globalization is your best friend—create so much interdependence that no single component’s failure can sink the whole. Global wealth inequality too produces instability and volatility, so you need to move wealth creation from countries with a lot to countries with little, to even things out. Spread American and Western wealth across the whole world. If that can’t be done, then you’ll just have to reduce the amount of wealth in the West. Social collapse is a great way to do that, but there will be collateral damage you’d rather avoid if possible.

 

You want to be a part of the governmental intelligentsia that help shape policy, or you at least need friends in that web. This is where think tanks and big-name NGOs come in handy. They have pull far above that of the average citizen, and are key to crafting policy that furthers your interests—subtly, without the public catching on.

 

These organizations also help shape military policy. America has the largest and most powerful military, which you can use to guarantee world peace. However, since America has a democratic form of government, you need to find a way to separate the use of the military from the desires of the voters. Make sure you sell new conflicts or potential new conflicts right so that the public won’t demand that their representatives pull the military back. And the worst possible use of the American military is homeland defense only. That huge military does you no good if it only defends the American homeland. That would allow rogue regimes to create chaos, and chaos usually hurts your bottom line. You need to spread the American military all over the globe to ensure peace everywhere possible. Wars can profit, but peace and a smoothly functioning economy profits more. That being said, anywhere that the American military doesn’t want to reach, use a different military, but make sure you keep it quiet and keep the atrocities out of the news. Although, if such news will cause the Americans to intervene, that works too. You may need to have your favored political candidates in various countries win elections partly through hawkish stances toward the Americans or other countries. As long as it wins, great, but just make sure they don’t actually put actions behind those words.

 

The media is your other best friend. Television, cinema, the music industry, video games, the news, and of course, social media…no matter the geography, you have multiple easy ways to condition the public with the messages you want them to imbibe. From Hollywood to Bollywood to Nashville to New York City to Silicon Valley, your friends in high places can make social conditioning happen. You also use these tools to distract people from what’s going on in society. Unless it’s something you don’t like, in which case you can blow it up in the media and social media for everyone to get outraged about.

 

Academia must also fall under your control. This is easy because academics are easily manipulated by the offer of pontificating their views to young minds while being highly paid and tenured. Fortunately, most academics live in lala-land and actually believe in all the stuff you’re promoting in order to manipulate society. Who cares…just put the academics to good use. They also go a long way in supporting and feeding talent into the many think tanks you use to shape policy. Further, they influence the ground army of socialist and anarchist street thugs whose activities and violence intimidate conservatives. Make sure law enforcement in the big Western cities—the hives of anarchist and socialist angst—are pulled back, giving these thugs freedom to create chaos until they are an accepted part of society and can easily suppress conservative expression on their “turf.”

 

Follow all these steps and you will achieve control. At that point, you only have to worry about the people on your own level or anyone left above you. There, on a plane above that of mere mortals, you will duke out your struggle for power and wealth, while the mortals below go about their lives, oblivious to all the ways you’ve have made the world a worse place by your scorched-earth march to wealth and control.

 

Oh, there’s just one problem: God sees. In fact, read Revelation 18 and you’ll see how someday, he will hurl down the elites who are happy to ruin the human race—which he made in His image—for their own selfish benefit.

What Other Nations Know: Economy Without Culture Will Fail

Regrettably, this past week saw the suicide of celebrity chef Anthony Bourdain. His show Parts Unknown was (still is) my favorite TV show. In it, he traveled the world in search of authentic cuisine, culture, subculture, history, politics, and interesting people. I’ve seen probably 30% of the 11 seasons of the show, but this was still enough to make it my favorite.

 

My favorite one episode is when he goes to Shanghai, China. It has a more somber, serious tone than most episodes, and it addresses big questions. The opening montage of images and music establishes the themes: Unimagined wealth and opportunity, the future, and the fear of missing out. These are the conversations that play out during the episode as Bourdain visits with Shanghainese residents.

 

I come away from the Shanghai episode with a few strongly felt beliefs, most of which had already been simmering in my mind but were affirmed and magnified, even emotionally, by this particular episode. The newest of these beliefs is the seemingly unstoppable nature of Chinese economic conquest. Supporting this is what appears to be, although I haven’t been to China, a culture far more homogenous than what we have in America. Atop Chinese culture sits the authoritarian Chinese government, which will stop at nothing to win the economic competitions of the world and which has great latitude in dictating how Chinese culture is or is not preserved.

 

The thing that makes rapid Chinese economic growth different than our own is that they have retained their culture through the process, or in spite of it. In America, we have not done this, as evidenced by the fact that there is no longer a universal definition of what it means to be American. The only things we all have in common are the land itself, our form of government, and the rights guaranteed in our Constitution. However, if you ask a Chinese person what it means to be Chinese, you will get a longer answer. Our problem is that land, style of government, and rights alone a culture do not make. The Chinese have fewer political rights than us, but no one would say they have a weaker culture than we do. And therein lies the key to their future economic victories: They are supported by a strong culture. Sure, China has modernized a lot and the culture has changed. But it’s still recognizably Chinese to any external observer. What would an external observer consider recognizably American? Guns? Barbecue? Fast Food? Militarism? “Freedom?” These things are not enough to sustain the world’s largest economy (us) forever. “Freedom” increasingly means different things to different people, after all.

 

The Shanghai episode also highlights a mortal threat to our continued success as a country: The utter inferiority of our big cities (i.e. 600K+ people) compared to those of East Asia. On what basis can New York, L.A., Chicago, and even D.C. compete with the likes of Shanghai, Tokyo, Seoul, and Hong Kong? They can’t, because our biggest cities have degenerated into powder kegs of racial anger, a “tossed salad” of subcultures with no unifying American culture, and the ever-present, unceasing rat race. Nothing in that mixture suffices as one definition of what it means to be American. It’s as if American culture means not having a culture. By definition, a culture unifies an entire people, but Americans are not unified by anything except the few things I’ve already listed.

 

The rat race is the single biggest contributor to the lack of American culture because it diverts us from addressing the other issues in a meaningful way. Does anyone really immigrate to America because they love American culture? People come here because it’s easy to make money here. In America, we have allowed the pursuit of wealth to blind us to the cultural degradation going on all around us. If you want to make money in America, you probably have to move to one of our big cities and sacrifice your health, sanity, and probably morals, for 20-30 years in the rat race before whatever is left of you can retire. Our small towns and rural areas have dealt with the resulting “brain drain” for a long time. As a nation, we should have been asking questions by now about whether this is optimal for our long-term national health, but our cities and states are too locked in economic competition to have the conversation. Plus, the whole machine has the media as its champion, continually lauding glistening city life as the path to happiness and prosperity.

 

Of course, China has brain drain too. In fact, many people in China move not just from the rural areas to the cities and suburbs, but even to other countries, like America, sometimes because of government oppression or the fear of it. But the people going from China’s small towns to her cities remain recognizably Chinese in culture. If I had to pinpoint the source of true “American” culture, the closest I could get would be in America’s small towns, i.e. “small town values.” If that is accurate, then the people who flee our small towns for economic opportunity in the cities often lose the things in their lives that made them culturally “American.” Our cities are insular, overcrowded islands of angst, narcissism, degeneracy, suspicion, and insolence. These same cities sucking the most talented young people out of our small towns and corrupting them is a sad sight indeed.

 

It’s hard to ignore Chinese success. The richness of other Americans doesn’t bother me, because I know that for the most part, they have paid a high price for it—basically, their sanity. But through at least the glimpse of Shanghai’s rich that I saw in Bourdain’s show, they seem to be both rich and sane. Of course, it’s a show, and we’re only seeing what the producers want us to see. But who would I rather sit down to dinner with? Five rich people from Shanghai, or five rich people from DC or New York? Shanghai, because I already know they are more cultured, seemingly more sane, and probably better conversationalists as a result of both. The only thing left that American culture teaches all Americans to care about—not just in the small towns but all Americans—is chasing the dollar. Ask yourself, who benefits from that arrangement? Not the average American, for the reasons I’ve stated.

 

In Europe, culture is way, way more important than in the US. At the same time, the US is an economic behemoth when put against even Germany, the EU’s strongest economy. There is no contest. There never will be, but it’s because Europeans don’t “live to work”—they make time for the things that make them culturally German, or French, or Spanish, or Polish, etc. China’s ability to stay culturally Chinese despite its meteoric economic rise is why, in my view, they are probably going to win the economic contest with the US eventually. America has exhausted its population chasing economic growth, and we basically have no national culture left. China has exhausted many things chasing success, such as its environment, but it still has plenty of culture, and the more of an upper hand they gain on us and everyone else, the more they can slow down and thereby preserve their culture even more effectively. So currently, I don’t see any way they can lose.

 

Add to this the specter of low birth rates haunting all advanced economies. America’s birth rate would I’m sure be below replacement level if it weren’t for immigration. Now in Asia, you do have massive birth rate problems, especially in places like Korea, Japan, Taiwan, and Singapore. The young of these countries can’t be bothered to slow down, get married, and start families in their mad pursuit of success. It’s worth saying that there is no point in preserving your culture if you have no one to pass it on to. So this is not an exoneration of East Asia’s rat race and birth rate woes and a condemnation of only ours. It’s a problem that affects both sides of the Pacific and that neither side is anywhere close to figuring out. And actually, the main culprit is right under the noses of all governments involved, but it is politically impossible to resolve, so I don’t see it changing under present conditions.

 

But take birth rates between East Asia and the US and use it as a study in contrasts. In China, they finally relaxed the One Child Policy into a Two Child Policy. Meanwhile, we have people marching in DC in insolent pink hats shaped like reproductive organs, demanding the right to kill babies in the womb. From an anthropological perspective, any people obsessed with destroying its own progeny is delusional and not living in reality. We also have people busily inventing “new genders.” You don’t have this lunacy in China, because people aren’t so numbed by nihilistic living and socially liberal indoctrination that they have nothing better to do with their lives. Then we have our media, such as our movies, TV, and music scene. These constantly pump degenerate idiocy into the lives of the young people who, as is necessary for societal continuance, should be getting married and starting families instead of trying to live out and identify with thug-life and street fantasies, or even yuppie fantasies. East Asian countries have been importing and trying to mimic our music and movies for a long time, but we’re doing them no favors by “exporting” these to them, no matter how badly they want them. No politician talks about the epidemic of single motherhood or single fatherhood or divorce in America or the indecency of our media culture. These things all represent large-scale challenges to the survival and perpetuation of our society, as they would in any society, but so few people do anything about it. That’s a lack of will and lack of agreement with one’s society that the Chinese, our greatest economic competitor, do not seem to be cursed with, and that’s why they’ll win if nothing changes.

 

I’m all for Trump’s desire to bring our economy back (which he has done much for and doesn’t get enough credit for), and to deal with our trade imbalances, but even he doesn’t address these underlying issues. It doesn’t matter how good our economy is if our society has no culture and no next generation to pass on our culture OR economy to. No politician I know of is brave enough to go on record with a statement like that. The Chinese don’t have to say it, apparently, because they aren’t making the same mistakes in this area. If China is able to get its birth rate above replacement level while ours continues to decline, we are toast.

 

Steve Bannon, firebrand conservative operative, has said a lot of things, and I don’t pretend to understand his ideology in much depth, nor do I agree with everything I know him to have said. That necessary disclaimer being out of the way (since we live in an age of guilt by association), there is one powerful statement he has said multiple times: “We’re not just an economy. We’re a civic society.” That statement is one that I have never heard a politician say any approximation of. In elections it always just comes down to the economy: “It’s the economy, stupid.” Economy is important, as any poor nation will tell you, but it’s not everything. Culture is a big missing ingredient in our society’s trajectory, meaning our economy is growing in opposition to what’s left of our culture. We are essentially in afterburner, expending costly culture to gain wealth. Somehow East Asian countries have figured out how blunt the “de-culturation” effect of rapid economic growth to a manageable level. We have not figured this out and show no signs of doing so.

 

Fortunately for me, I live in New Mexico, an undisputed beacon of culture. (I plan to write more on New Mexican culture in the future.) New Mexico is also a “poor state,” and tends to score in the bottom 10 states by multiple economic indicators. But New Mexico has figured out culture, and a lot of the culture here ranges in age from 100 to 400 years. I would like to see New Mexico be a more prosperous state, but not at the expense of its culture. Economies can come back, but once lost, culture is harder to retrieve, relearn, and revive. Contrast this with Maryland, the richest state, and the place I recently moved back to New Mexico from. Maryland has pretty much no prevailing culture, despite subcultures in places like Annapolis and “tossed salad” multiculturalism in the counties close to DC.  So as New Mexico struggles to climb the economic ladder, I think to myself: Do it carefully, or your future will look like Maryland, where the only prevailing “culture” is the rat race because there is nothing else that all Marylanders have in common.

 

A society can survive a bad economy, but no society can survive a lack of culture. Without anything binding them together, people will fragment based on their subcultures, just like a wrote about in my essay on Singapore and multiculturalism. I fear this is the path America is on unless we can re-grow a culture and stop sacrificing everything for the economy. After all, the economy exists to serve us, not the other way around.

Why Are We In So Much Debt?

In modern society, there is pressure from all sides to achieve a certain standard of material possessions. The big house, the nice car, the exotic vacations, living in the best school district or sending your kids to private school, and so on. These are not bad things themselves, they simply exist, but have you ever noticed how the pressure to acquire these things, usually involving going into debt, seems to come from every direction? The demand is created by advertising, and then, oh look, you receive a credit card offer by mail or your bank offers you a loan when you log in to your bank website. There are so many ways in which society pressures us to use debt to acquire items that project status. In fact, as people wear and drive around and talk about their status symbols, it becomes a way that companies advertise to us without even having to spend money.

 

I bring this up because we as a individuals and as a society need to question the factors working in harmony to harvest consumer debt from us. Too few people question the paradigm of going into debt to buy a car, then going into debt to go to college, and then going into debt to buy a house, to say nothing of other consumer debt. We subconsciously treat these forms of debt as “start-up costs” required to live a typical life. If I was a bank, university, car dealership, or credit card company, that’s exactly how I’d want society to think.

 

Before credit cards, people couldn’t go into debt to buy most things. I’m sure mortgages and car loans existed, as well as business debt, but how much consumer debt was there? Once credit cards were widely available, it became an arms race of who could acquire the most the fastest. From what I’ve read, many high-salary families are also highly leveraged, which means it’s not even a matter of how much money you actually make. The rich are still borrowing above their income.

 

One of the biggest problems caused by debt is that our debt hangs over us like a cloud, restricting our possibilities in life. It adds stress to what would otherwise be a less stressful life. Our debt keeps us up at night, as we lay there wondering where we’re going to find the money to pay it off. “Should I take a second job?” we ask ourselves. Those with family commitments know the answer is usually no. They more debt we accumulate, the harder and longer hours we have to work to stay ahead of our bills. We then work so hard that we need that vacation or new toy or hobby for stress relief, so we buy it on credit, bringing more debt, and the cycle continues. If we hadn’t gone into debt in the first place, there would be no stress to relieve. The question is, how do you create a life that is not stressful enough to have to use debt to escape?

 

If you add up all your debt (we’ll say sans mortgage) and divide it by your annual salary, you would get how many years you have to work to pay it off if that’s all you did with your income. For me, it comes out to 0.55 years, which is over six months of not buying food or any other living expenses at all, just paying off debt. It’s May right now, so that means it would be November before I could buy food again. Obviously this is an extreme example, but this exercise shows you that really, debt is a form of slavery. So much of the work you are doing right now, whatever the percentage is, is purely for the purpose of paying off debt. If we knew how long and hard we would have to work to have the money to buy something beforehand, the odds that we would buy it are a lot lower. If we knew that we could be exempted from the weeks, months, or years of work needed just to pay for something we would otherwise buy with debt, we probably wouldn’t buy it and thereby avoid all that extra toiling. But currently, we buy it and add on all those weeks, months or years without thinking about it!

 

According to USdebtclock.org, on this day in 1980, American credit card debt was about $123B. Our workforce numbered 90,681,763 people, which comes to $1,356 per worker. Meanwhile, today American credit card debt is just over $1 trillion and our workforce numbers 155,219,138 people, which comes out to about $6,590 per worker. Our population grew by 71%, but our average credit card debt per worker has grown by 386%! Clearly, our spending patterns have changed. I know health care has gotten more expensive, but I don’t think that fully explains the increase. That leaves discretionary debt—buying stuff just because we can.

 

I see a relationship between meteoric US economic growth over the past several decades (compared to 1950s and 60s levels) and the increasing levels of private debt (to say nothing of public debt). To me, it’s as if an larger and larger percentage of our economy is based on debt, but the problem is the debt must eventually be paid—it’s impossible for debt to continue on forever. That’s sort of like a fake economy, if you think about it. Accumulating large-scale debt without ever having to reconcile has never worked before in history, so there is no reason to assume it will work this time.

 

Pay off your debt and don’t take on new debt unless you are very confident it is financially worth it (for example, a student loan for a lucrative major or other schooling). Don’t be a cog in the debt machine.