Even If You Don’t Owe A Penny Personally, Debt Still Affects You!


Debt is so all pervasive in America and throughout the world.  In America, 57% of all Americans could not come up with $500 for an emergency!  Those people are mired in credit card debt, mortgage debt, student loan debt, car debt – even mattress and furniture debt.  They are doomed!  But, what about people who have no personal debt?  Shouldn’t they be o.k.?

Dream on.  Voters are constantly passing bond issues at the ballot box.  Bond = debt, and if your neighbor votes to put you into debt, and he is among a majority, then you have debt even if you don’t want it.  Bond issues seem to almost always pass.  People are just plain stupid about debt.

People in debt are restricted in their freedom.  They are inhibited to change jobs, take a risk and start a business or whatever, because they need that regular paycheck to keep afloat.  This makes people feel trapped desperate and despondent.  The net result is a loss of innovation, a loss of entrepreneurship, a loss of imagination, a loss of hope, and ultimately a loss of productivity.  It also leads to divorce, suicide, criminal activity etc.  You see the bumper sticker from time to time that says; “I owe, I owe, and so it’s off to work I go.”  These people, for the most part, are living paycheck to paycheck.  A major injury, health issue, or unexpected financial burden can push them over the edge into bankruptcy.

The government saw this coming, so Congress passed a law that you cannot include a student loan in a bankruptcy filing.  Hey Congress, you folks are real heroes!!!  So how does this affect you the “debt free” person?  Obviously if people, in large numbers, are suffering like this, then it affects the entire economy.  They can’t buy products and services which leaves unsold products in the factory, on the shelf etc. and then when the demand dries up, people who have good jobs lose them, and the cycle spreads in a wider circle.

If the individual condition is not concerning enough, be aware that almost every state and city in the U.S. has underfunded pensions (a pension is a debt owed by the government to retired employees), and that will come home to roost soon enough.  Social Security is a general pension promised to all private sector workers of America, and it is insolvent.  The debt owed to nations around the world because of all of the Treasury Bonds America has sold will come home to roost also.

Right now, America owes more in debt than they produce in a year’s time – GDP (Gross Domestic Product).  The debt continues to rise, and if America has to raise interest rates in order to make bonds attractive to sell in the future, then that will eat up a big chunk of the revenues that come from taxation.  Then what?  Higher taxes will be one of the outcomes.  The other outcome will be forced spending reductions by government which will put more people out of work and slow the economy even more.  Right now, there are 95 million Americans out of work.  How many more can we afford to have unemployed?

So, you see, even if you have no personal debt. debt will affect you and do so adversely.  So if you are one of the smart ones, stay out of debt, and be prepared for an economic catastrophe that will rival, if not exceed, the great depression of the 1930’s.  This time, there will not be people knocking on your back door asking if they can do some odd job around your house for a sandwich or a piece of meat.  No, this time, they will break your door down, take what they want or can, and leave you terrified if they are merciful, or they will leave you dead if they are not.

Yes, debt affects us all, and it’s going to be very ugly this time around.  Be prepared, and to be forewarned, is to be forearmed.


Pensamiento Peligroso writes the truth as he sees it, and if it upsets you, then it makes you think!

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