There is no good debtor

Our economy is built on lies. We are told that debt provides an opportunity to move forward when in reality most people spend their entire lives stuck on the debt treadmill. Take out student loans to go to college to graduate and get a good job; borrow money to increase your credit score and buy more things; take out a mortgage to become a homeowner; become an entrepreneur with a small business loan. Debt is presented as a crucial rung on the ladder to a better life, a stepping stone to the American Dream. If we can’t get out of these “good” debts, we are to blame. But the fact is that most people can’t get out of it – three-quarters of people take their debts to the grave. On average, Americans die with $62,000 in debt.

The capitalist fable of upward mobility has always been an illusion. While debt lifted some out of poverty (access to credit was a cornerstone of policies that helped create the white middle class), the majority were left behind or pushed into predatory contracts to which they did not can never escape. Debt, however, is more than a trap. It is a form of social control. To give just one example, in 2019 the U.S. military actually admitted to exceeding its recruiting targets by targeting student debtors. As Army Recruiting Command Maj. Gen. Frank Muth said, “One of the national crises right now is student loans, so $31,000 is [about] the average. [. . .] You can leave [of the Army] after four years, 100% paid for state university anywhere in the United States. Being in debt makes us vulnerable to predators of all kinds, including predatory moneylenders, predatory debt collectors, and predatory military recruiters.

In myriad ways, debt erodes our freedom and forces us to make unbearable choices: Should I pay my mortgage or pay for my chemotherapy? Should I take out loans to pay for my education or enlist in the military to get financial aid? Should I put the groceries on a credit card or be late with the rent? Should I go to a payday lender or sleep in my car? We internalize the narrative that we have gone into debt freely and the burden is ours alone to bear when nothing could be further from the truth.

Being indebted is usually a shameful experience. We are hounded by collectors by phone and mail, our credit ratings plummet, and with them our chances of getting housing, loans, and even jobs. Our self-esteem, self-esteem, and physical and mental health also plummet. Debt weighs on the body and mind, stresses us out and makes us sick. It’s not an accident.

A loan is a weapon to make us feel helpless. Mortgages are a good example. In 1914, Ford Motor Company embarked on a new experiment that gave it near dictatorial power over its workers. Henry Ford created his own secret police force and gave it the Orwellian name “Ford Sociological Department”. The job of this department was to intrusively spy on factory workers and their families to ensure that they sufficiently conformed to Ford’s ideas of the American way of life. This meant emphasizing thrift and straight moral living (no gambling and certainly no political agitation). Among other things, they wanted to know how much money each worker had saved, in which banks, how much debt he owed and to whom.

Investigators particularly discouraged renting rooms, even to recent immigrants who also worked at Ford, and pressured employees to buy their own homes and helped them find mortgages. Why would they care? What difference did management make if their employees rented or owned a home? First, they discouraged the hiring of boarders because, despite the gospel of thrift, they did not want workers to have additional sources of income. They wanted the workers to be completely dependent on the income from their factory work. They also discouraged workers’ wives from working for money, both to serve the ideal of a single male breadwinner and to make the entire household dependent on a single factory income. .

Second, forcing people to take out mortgages made them docile workers, unlikely to join a strike or cause trouble because it could jeopardize their ability to pay their mortgage. Anyone who failed to meet the strict standards of Ford’s sociology department could have their pay suspended and placed on probation until they “change their life,” or they could be fired if they resisted this control over his daily life. Mortgage debt meant that Ford could take away more than workers’ jobs – it could also threaten their shelter.

Today, our privatized health care system fulfills a similar function, although it is less explicit. Tying medical coverage to employment keeps workers compliant and forces unions to devote more of their resources to fighting for adequate and affordable health care instead of higher pay, shorter shifts and genuine worker ownership. Many people are tied to jobs they despise and can’t quit because they need the private insurance available through their employer. After all, perhaps the thing worse than a job you hate is not having one, especially if you have a pre-existing life-threatening condition. Everyone knows that if you’re uninsured, a single accident can result in a mountain of hospital bills. More than a third of Americans have medical debt.

When COVID-19 hit, people weren’t just afraid of contracting a deadly disease – they were also afraid of losing their jobs along with their insurance, and tens of millions did so overnight. In the months leading up to the outbreak, centrist Democrats and their allies worked hard to attack universal health care.

For example, in early February 2020, the leadership of the Culinary Union, which represents casino workers, spoke out against Medicare for All, arguing that it would cause their members to lose their private insurance. (In the end, members stood up to their leaders and voted overwhelmingly for Sen. Bernie Sanders, who supports Medicare for All.) A month later, casinos were shuttered by the crisis. Even though these casinos received a big bailout, more than sixty thousand culinary workers were out of work and without medical coverage. The pandemic has exposed the pathologies of America’s private, employer-driven, for-profit, debt-creating insurance system. In response to the global crisis, industry analysts have predicted that health care premiums are set to rise by 40%, ensuring that more and more people will pay for their medical care with credit cards.

Debt, in this sense, is a kind of concealment. Our private contracts and our desperate attempts to be “good” debtors all contribute to concealing a larger crime: the crime of treating health care, housing and education as centers of profit. Think of the idealistic young student who wants to become a lawyer so he can fight for justice and protect those who have been wronged. By the time they graduate from law school, they are faced with six-figure student debt. They could become court-appointed lawyers — or enter corporate law. A salary in company law allows them to repay their loans. Suddenly, the whole reason they wanted to study law was replaced by its polar opposite. Eighty percent of Harvard Law School students, to cite just one example, enter law school saying they want to practice public interest law.

However, once graduated, 80% of them practice corporate law. (“But there is a Civil Service Loan Cancellation Program to solve this problem!” you might say. To date, the government has refused over 99% of those who have applied for their loans under this program.)

It’s not just the Ivy League brainwashing – although there’s certainly a fair amount of that too – it’s the disciplinary function of debt. Most of us want to be better people than we are allowed to be. We are forced to do things we are ethically opposed to, just to survive. We need to service our loans instead of serving the greater good.