Tuesday, January 18, 2011

About Debt

I like to read Michelle Singletary’s column in the Washington Post because she is not a financial professional so much as she is a financial synthesizer, as I am. She researches all the current information from various public sources about personal finance, and then she opines about it based on her personal beliefs. Like me. We don’t always agree, but most of the time I think she has her head screwed on right. She is anti-debt, perhaps rabidly so, because that’s how she was raised. In this current economic crisis, that attitude comes across as sheer prescience. How did she know the economy would tank? She didn’t. She grew up knowing how to squeeze a penny and stay out of the clutches of creditors. The heretofore comfortable middle class has a more benign view of credit than does Singletary, whose grandmother, a low-paid nursing aide, managed to support a family through persistent thrift. The grandmother knew that the kind of credit she could obtain would likely come at a huge price, a price she was unwilling and probably unable to pay. By contrast, for many of us, credit has been easy and relatively cheap for many years. And then, just like the frog being slowly boiled, it got a little more complicated, and a little more, and now we’re in severe danger. The frog could have hopped out of the pot when the water was cool, but didn’t sense the danger, and that’s exactly what has happened with the majority of Americans who have become overwhelmed by debt. Yes, there are many contributory factors. But Michelle Singletary’s grandmother knew that debt itself was peonage---like unto slavery---and she wasn’t signing on for it. Too bad so many of us closed our eyes to the danger for so long.