It's no secret that western societies are becoming ever the more crippled with debt. In Canada we have an interesting television show about debt, and I imagine there are numerous more in the United States. Til Debt Do Us Part is a spectacle of how out of control debt can become for average middle class people. Hosted by Gail Vaz-Oxlade, it explores the downward spiral into debt that families often find seemingly insurmountable. With budgeting, lifestyle changes, and re-education about money, the families find their way back to financial security. If only it were that easy.
Instead of looking at individuals and blaming them for making poor decisions about spending, I believe it makes more sense to take a wider sociological angle at why we engage in the economy. A culture that's built on status symbols is a massive problem. People's idea of self is connected to what they own: the clothes they wear, the cars they drive, the music they listen to, the decor in their kitchens. In highly individualistic societies, like in Canada and the United States, there is a massive pressure on people to fit in by finding their own identity. This identity is less tied into beliefs than into the materialistic property that surrounds them. This leads people to make purchases, spending more than they can afford, largely because credit is available. This is something that I like to call "spending beyond reason".
But while the previous paragraphs really expose the degree to which people are spending in order to fit in, this actually makes up the minority of those who are in debt. The lower middle class and the working poor are generally in debt because they simply cannot afford the necessities of life. It comes down to many between choosing to pay for a tank of gas or groceries, and the only way to afford both is credit. Thus begins a cycle from which tens of millions of North Americans simply do not emerge intact. There are, infrequently, television shows about this because it's not glamourous and of course because it would really get people thinking that maybe personal choice isn't such a powerful component of one's financial standing. Effectively, it all boils down to the same principle, and that's that money is all around us but seldom understood.
So who, then, is at fault for this system of poor education around money, a climbing debt load, and a generally unsustainable economy? The consumer? The lenders? Government? I'd argue that they all play a significant role in creating a society that is consumed with the idea of consuming. How the system evolved to its particular manifestation is, well, anyone's guess, but I'd argue that maintaining it is a vestige of the elite: lawmakers and large financial institutions. Government is pressured by lenders, more so in the United States, to create favourable legislation around what banks and credit card companies can do. Individuals and groups in society, particularly those who are economically and otherwise marginalised, have such a limited voice against such powerful blocs of power.
Often the assertion is made, as in the documentary Maxed Out, that this is in fact leading to the destruction of the middle class. In almost occupy-esque language, the increased saturation of credit has deeply widened the gap between the rich and poor. In all fairness, it absolutely is the collapse of the American middle class. However, to frame the argument that way is inherently classist. It's effectively saying that nobody really cares that everyone is becoming poor, but only that the middle class is eroding. America, more than virtually any other developed country, has minimal sympathy for its working poor, namely because the American Dream is widely believed. The logic is such that those who have something got there through hard work and determination, while those who are in dire straits got there as a result of their poor choices.