Someone unreliable called me today and said that GM is going out of business. So off I went to the Detroit News website, where GM's auditor has said that the company may not be viable, which may of course be a smokescreen in preparation for upcoming meetings with the President. Such is politics. May, may not, probably, should be, maybe, and almost absolute certainty. This is why I don't even watch them anymore. You see, however, the effect all the mongering has on people, like the one who called me today with news of GM's doom.

I have heard others, Obama voters, desperately cling to the notion that Washington will save them. "Did you hear? Obama is giving us back $400 as part of the stimulus package?" Oh, yes, and that makes up for losing your $30,000 a year job. Hmmm... Think, people. He is expanding the Federal Student Aid program, which again, is something that could benefit me, but I still don't see how this is helping us have a vibrant economy. What is your degree in business going to get you if there are no businesses to run?

I am no political animal, but it's not hard to see that the problem under Bush and the problem under Obama are the same - and nobody has any idea how to fix it. Namely, we spend more money than we make. Maybe consumers think it's ok because the government does it. Republicans, democrats, consumers - none of them have any clue how to maintain a checkbook. How can anyone be happy about spending money they don't have?

So, I would like to address, in a semi-intellectual manner, through a brief few hours of research, the following questions: What is the psychological nature of debt? How are our governing institutions complicit in debt-spending? Is debt really a bad thing? What do interest rates have to do with it? Is this economic system really an accurate reflection of capitalism?

Whether one is religious or not, you would do well to recognize Jesus’ portrayal of Herod’s Temple as a “den of robbers” because of the moneychangers who had set up shop there. And that this was an important and fateful event in the history of mankind. There is also a reason why Islam has banned the charging of interest on loans and Catholicism has endorse it only since 1822. And it is no coincidence that luminaries from George Washington to Winston Churchill have spoken on the evils of debt. This, from Andrew Jackson, sums it up well: “Live within your means, never be in debt, and by husbanding your money you can always lay it out well. But when you get in debt you become a slave. Therefore I say to you never involve yourself in debt, and become no man's surety. If your friend is in distress, aid him if you have the means to spare. If he fails to be able to return it, it is only so much lost.” I am not here to argue against the existence of debt itself, although it is not a given that we cannot have a dynamic economy without it. The existence of debt, however, creates a social dynamic of dangerous proportions, and is partially responsible for, among other things, crime, divorce, stress, lying, and a general imbalance of power, specifically the imbalance between creditor and debtor.

Why then do we take on debt if it is so reprehensible? Is it that our immediate “needs” and desires supersede any conflicting thoughts of what miseries the future may bring? Advertisers deign to make going into debt a pleasurable experience. The desire to be accepted in society, to drive the “right” car, to own the “latest” video game system, etc., is well-understood by professionals who sell credit and make you think you need it like water in a desert. The instant gratification phenomenon has been discussed, talked about, written about, chewed up, and spit out, and yet we still just don’t seem to get it. I have debts myself, so I cannot exclude myself from the scolding. Everything I have read points to the lack of patience, the notion that you “deserve” to drive that Corvette that is way beyond your means. Wealthy people go into debt as well. Debt depends less on the amount of money you make than on your attitude towards spending it.

Credit cards, alone, however, do not make up all consumer debt. Unwieldy mortgages, hospital bills, cars, education expenses, and the like all contribute to a sense of unease that contributes to the general pessimism of our national economy and the stagnancy of growth.

Why shouldn’t we consumers spend money, though, when corporations and our own government can’t seem to find a way to stay within a budget. There is always talk about “leverage” and “debt-to-equity ratio” and several other nauseating terms. Do you remember the $484 million in salary and bonuses Lehman Brothers CEO Dick Fuld received last year even as he was “leveraging” his company into the ground? He is but one sign of an apocalypse in our economic system so long as we rely on the Wall Street model of generating false excitement and speculation for the short-term benefit of its employees and strongest investors, while middle of the road mom and pop companies and people like you and me are left holding the bag at the end when it all collapses. This isn’t capitalism. Capitalism relies on the principle that you are producing a scarce product or control a scarce resource. Ideally, anyone with an idea or a skill that someone else wants, anyone who builds a good product, should be able to earn a decent living. Our current system instead rewards the guy who loans the craftsman money for his tools, not the craftsman himself. I can’t believe there is not more outrage. Two hundred and fifty years ago we were having tea parties for crying out loud! And we celebrate that as a symbol of American freedom! Now we bow down before the King Georges of our day, people like Dick Fuld.
But then, what can we really expect from a government whose culture is fat and cumbersome, where republicans and democrats are more like each other than they could ever be with the “common” folk. Or, perhaps that is wrong. After all, we common folk, most of us, cannot seem to control our urge to spend money, either. Our government, rather, clearly acts against the best interests of her people when she spends without restraint.

My favorite quote from a governing body comes from Alan Greenspan, not officially a government employee, but still, former Chairman of the government devised elitist organization, the Federal Reserve Bank: “I must say, I never expected to see the day where I would be talking about anything other than reducing the debt, I'm running into the tyranny of zero, which is where you can't reduce (the debt) any more.” Really, Mr. Greenspan? You are reducing debt by lowering interest rates every time big business doesn’t think the economy is growing fast enough to keep buying their products? After all, what better way to convince consumers to spend more than by offering lower interest rates (and thus lower payments) on all the crap our little hearts desire? If you wanted to reduce debt, shouldn’t you raise interest rates so that people put their money in the bank and gain interest from it? Wouldn’t higher interest rates discourage people from getting credit cards and loans once they figure out how much they will be spending in interest each month? Shhhhh…. Don’t tell that to the federal government, which casually overlooks the money spent each month paying off our foreign debts. But no, that would go against the end goal of selling more unnecessary crap to people with unnecessary fantasies of what they should own. And yet, you Mr. Greenspan, believe that having low interest rates actually encourages the lowering of debt? And you went to college where? The Adam Sandler School of Golf? What the fuck! I’m exasperated.

Banks certainly clamor for these low interest rates as well, so they can get people to borrow more money and so that it is easier to lend to each other. Why is this even allowed? Shouldn’t the market control interest rates? When banks run out of money to lend, the market will correct itself and rates will go up. Supply and demand. This way, we will put more money in the bank, which will in turn allow banks to have the cash they need to lend it to other people, and all this without having to borrow more cash from another lending institutions.

I’ll never figure out completely why we allow banks, Wall Street, and our government to conspire to enslave the rest of us, sedating us with easy credit, which of course only serves to enslave us further. It’s like the old conspiracy theory that the government introduced drugs into urban neighborhoods to keep them peaceful despite the prejudices and racism that exist. While I would not discount that theory, I don’t necessarily believe it either. I do, however, believe that our economic system is a giant conspiratorial machine that has largely constructed itself over the decades and centuries. What should we dismantle first? And what will pop up in its place?

For another night, perhaps……