The Hidden Secret of Debt


“The man who never has money enough to pay his debts has too much of something else.” James Lendall Basford

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The real problem with debt is not that you have to repay it. The compounding interest that continually increases your principle is difficult to overcome, but it’s not insurmountable.  The stress that comes from having debt hang over your head is painful, but something that millions have dealt with.

No, the real problem with debt is that it’s addictive.

Debt gives you a false sense of wealth.  It fuels the belief that you can afford something that you cannot.  It neuters your self-discipline and teaches you to “finance” those things that you can’t afford.

We become “dependent” on things that we never needed in the first place.  Our desires are continually satisfied by things that would be nice to have.

Debt fuels the entitlement mentality.  We want what we want, when we want it, and so we get what we want, when we want it.  We’ll worry about the ramifications down the road.

With debt, we become addicted to the idea that we can have whatever we want, whenever we want it.  In reality we are only limited by the stupidity of our lender.

Nearly our whole society is burdened with more debt than we can afford.  According to NerdWallet, as of September 2013, the average American has $15K of credit card debt, $147K of mortgage debt, and $30K of educational debt.  The average household income in the US is $50K.

Americans have committed four times their annual earnings to purchases that somebody else actually paid for. For every dollar we make, we owe three more.

Our country is faced with the same issue.  We have become so addicted to government spending that we call it a “shutdown” when less than half of the government is asked to go without while we fix a fundamental budget issue.

The reality is that living with the type of debt that we have incurred is unsustainable.  Regardless of your politics—simply, and mathematically—we cannot afford to continue to incur debt at the rate that we have been.

Spending more will not propel ourselves out of this problem.  It is idiocy to think that it will.

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