First question: What does this have to do with sustainability?
Answer: Debt is unsustainable. Entering into a loan of any sort is borrowing against the future. Sustainability is consuming resources no faster than they can be produced. The dilemma is clear. Borrowing is a mechanism that allows you to consume future production.
Second question: Why the title?
Answer: The word “mortgage” comes from Old French and means “death pledge”.
Third question: What else do debt and sustainability have in common?
Answer: Just like fossil fuels, you can easily reduce dependence on debt but it is almost impossible to avoid it in today’s society.
Fourth question: what other burden does debt put on the individual?
Answers: (partial list)
- The more debt (as measured by debt as a percentage of income), the less financial flexibility you have
- Paying all those bills complicates life
- Debt survives you and adds a burden to those that survive you
Question 5: What is the worst kind of debt?
Answer: Unsecured debt. That is credit card and lines of credit. They are the most expensive. It is OK to USE credit cards as long as you pay off the balance monthly. The credit card companies seem to have contests to invent new fees and charges to add when you don’t pay it all off or pay it late.
Question 6: Can I avoid debt completely?
Answer: Probably not. Durable goods (cars, refrigerators, houses) have become expensive because we consumers have been trained to think in terms of monthly payments instead of total cost and how long are you going to owe for it.
Question 7: Can you rant about this some more?
Answer: Oh yes. The 60 month car loan is criminal. Owing for a car for 5 years? What are the odds it will still be running in 5 years?
Question 8: What about student loans?
Answer: Inflation of education (i.e. rising cost of college) is faster than just about anything. This inflation is BECAUSE of student loans and grants. Worse yet, the graduate is burdened with debt that generally offsets the value gained by knowledge from college. Here is an alternative:
Question 9: Do you know that even the dollar is debt?
Answer: Yep, has been since the creation of the Federal Reserve in 1913. Debt-based currencies allow manipulations that turn national economies into casinos. By the way, all currencies are debt-based. Here is a partial list of the problems CAUSED by debt-based currency: – Bankers make more money from speculation than money lending – Malinvestments – money flows into whatever is politically correct, not what is the best return on investment – The road to hell is paved with good intentions. The people who decided where the money should flow make mistakes. – For more of the sordid history of the Federal Reserve click here
Question 10: So what is the alternative?
Answer: An asset-backed currency. Prior to 1913, a dollar was a warehouse receipt for 1/20 of an ounce of gold or an ounce of silver. A currency that is freely exchangeable at a fixed rate into something tangible is much less susceptible to manipulation.
Tags: debt, unsustainable