Source – charleshughsmith.blogspot.ca, By Charles Hugh Smith
– Those who refuse debt, regardless of the sacrifice, are starving the parasitic, exploitive machine; those with debt are feeding it.
We hear a lot about debtors, and very little about undebtors. I define an undebtor as an individual or entity that has sworn off debt or considers debt a necessary evil that must be paid off as quickly as possible regardless of the sacrifices required to do so.
Undebtors are created by these conditions:
1. People with cultural/familial values that eschew/fear debt.
2. People who have been crushed by debt in the past and refuse to repeat the experience.
3. People who recognize debt as the status quo’s favored instrument of oppression, control and exploitation.
4. People who understand that paying off debt is the easiest way to earn a zero-risk significant return on one’s money.
If you pay off a 12% credit card, that’s the equivalent of earning 12% on your money.
There’s no mystery as to the low profile of undebtors in the mainstream media: undebtors are the equivalent of the cross to the vampire-parasites peddling debt.How can banks and other financial parasites make money off the undebtors? They can’t, and therein lies the problem for the status quo, which lives off the blood of debt extracted from debt-serfs.
The profits skimmed off debt fuel the speculative gambles that benefit Wall Street, and fund the politico lackeys and toadies who enforce the power of banks and Wall Street.
Debt also funds insurance companies and pension funds. Remember, every student loan dragging a starving student into servitude is owned by a pension fund or insurer as a solid, high-yield asset and every subprime auto loan that is extracting a pound of flesh from a marginal borrower feeds Wall Street’s profit machine.
People talk about starving the machine. You want to truly starve the machine? Get out of debt and stay out of debt, regardless of the sacrifices needed to do so. I personally know many immigrants to the U.S. who paid off 30-year mortgages in four years or less. How did they do it?
1. Everyone in the family 16 or older worked.
2. Everyone’s earnings went to pay off the mortgage.
3. No money was squandered on cable, dish TV, eating out, new clothing, costly vacations, etc. Zip. zero, nada.
There was a saying in the 1960s–you’re either part of the solution or you’re part of the problem. Those who refuse debt, regardless of the sacrifice, are starving the parasitic, exploitive machine; those with debt are feeding it.
Yes, I have debt, too, but we are doing everything in our power to pay it off as soon as possible. That’s all anyone can do. But it’s important to do so, starting now.
http://charleshughsmith.blogspot.ca/2015/03/the-undebtors-sworn-enemies-of-vampires.html
Related…
Today’s Young Adults Will Never Pay Off Their Credit Card Debts
More than three-quarters of renters between the ages of 18 and 24 spend more than they earn every month, according to a survey of 1,000 renters (of all ages) by Rent.com. This is the case even though 17% of respondents in that age bracket say they’re willing to live with roommates to save money.
More than 20% overspent their income by more than $100. That’s every single month. And since they haven’t built up their credit histories yet, it’s a safe bet that these young adults are paying relatively high interest rates on the resulting credit card debt.
Although more young people than older adults blame “socializing” as a barrier to saving money, most young people aren’t knocking back $20 drinks in trendy lounges. They’re struggling with much more prosaic financial demands. For 42%, rent is their top expense, while 18% say transportation costs eat up the biggest chunk of their earnings and 22% say paying for food eats up the greatest share of their monthly budget.
To a disturbingly large extent, the young and the broke are relying on credit cards to make it until their next payday. This obviously isn’t sustainable in the long run, and it’s going to put a huge drag on this demographic’s spending power even after they reach their peak earning years, because they’ll still be paying interest on that carton of OJ or box of spaghetti they bought a decade earlier.
A new study out of Ohio State University found that young adults are racking up credit card debt at a more rapid rate than other age groups, and that they’re slower at paying it off. “If what we found continues to hold true, we may have more elderly people with substantial financial problems in the future,” warns Lucia Dunn, co-author and professor of economics at Ohio State University. “If our findings persist, we may be faced with a financial crisis among elderly people who can’t pay off their credit cards.
People born between 1980 and 1984, for instance, already have an average of $5,689 more in credit card debt than their parents did at that age. And remember, those parents are members of the generation that’s now starting to worry about whether or not they’ve saved enough for their impending retirements. Their kids are going to be able to save even less since they’re funneling so much more into servicing their burgeoning debt.
Along with more debt, this age cohort is paying off those debts at a sharply lower rate than their parents. Dunn says a lot of these young people are never going to get out from under their credit card debt. “Many people are borrowing on credit cards so heavily that payoff rates at these levels are not sufficient to recover their credit card debt by the end of their life, “ she writes in the study. “We can expect more people to carry credit card debt at death, which could have loss implications for the credit card issuing banks.”
Banks can file a claim against someone’s estate if they die with both debt and assets, but if the deceased doesn’t have any assets, banks can’t go after their heirs and have to just eat the loss. This is bad news for the banks, but sympathy may also be in order for the people who literally live their lives under a cloud of credit card debt.
http://business.time.com/2013/01/17/todays-young-adults-will-never-pay-off-their-credit-card-debts/
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