Credit is Today’s Indentured Servitude
August 7th, 2007 by Ana
I came up with the idea that credit is the modern equivalent of indentured servitude a couple months ago, and as US history shows, the indentured servitude system could lead to outright slavery. It would seem I am not the only one who has had this thought, as I just came across an article called “Debt-The New American Slavery.” I don’t know much about the author Michael Mihalik but it sounds to me like he is barking up the right tree.
Debt, especially unsecured debt like credit cards, is stealing America’s freedom one interest charge, one late fee, one over-the-limit fee, and one annual fee at a time. In the old Financial Peace videos and also in the Live Events, Dave Ramsey pulls out a thick heavy chain to symbolize debt that he got himself into when he was younger. I wonder how many hot buttons he would push if he brought out actual shackles as his visual aid. I think it would be a much more accurate visual aid with the appropriate visceral reaction from most people!
Yes, actual shackles like the kind that were used before 1863 here in the U.S. in the slave trade and after the Civil War for prisoners. The credit card industry is trying to sneak a leg cuff around the ankle of every college student: I see them on campus a few times each semester. If they can slap two leg cuffs on you, then they can hobble you by shortening the chain between them.
A mortgage is the wrist cuff on your non-dominant hand…you can still function but it will get in your way if you really want to do something big, and tethers you to a fixed point (payment). A car or truck payment is the wrist cuff on your dominant hand, however! It hinders even the simplest of tasks, and if you have both your hands are literally tied financially. A student loan is that fat thick leather waistband that they run both wrist chains through to tie your arms close to your body.
By the time you get into a HELOC or debt consolidation loans, the debt/credit industry has now put an iron collar around your neck, complete with a big ring to clip their leash chain to. The final indignity is the “services” that supposedly exist to “help” the poor and are only found in the lower-income areas: payday loan, check advance, and rent-to-own companies. These are the noserings in 00 gague!
Michael Mihalik says: “I realized that I was unsuccessful at controlling my finances because before I could change the way I handled money, I had to change the way I thought about money.” He says his first lesson was “Debt is slavery.” He is absolutely right! Dave Ramsey loves to quote the book of Proverbs in the Bible: “The rich rules over the poor, and the borrower is slave to the lender.” Considering I still have a mortgage (left wrist cuff) and a truck note (right wrist cuff) I can FEEL the truth in this…as our hands are still tied until hubby and I get that truck paid off once and for all…sometime in the spring with April 2008 as our goal.
Is this post anywhere near politically correct? Probably not. But trust me…without those credit card shackles on our feet we have the ability to move around now with our budget. Budgeting is the key that will help you unlock those shackles…but you need to pick that key up, put it in the lock, turn it, and join us in the revolution against debt slavery that is alive and growing today in America!
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August 14th, 2007 at 1:35 pm
I agree with you Ana. Budgeting is really the key to free ourselves from debt.
October 14th, 2007 at 7:12 pm
I totally agree with the indentured servitude analogy.
Whenever a dialogue is started about this subject people without any debt problems often pontificate about people out there overspending and only fools or greedy people get caught in the trap.
The problem I see is that just like big tobacco the credit industry gets you when you are young and optimistic about life. They target colleges heavily and people with their first real jobs. They love young two income couples.
The problem is it gets harder and harder for many young people to pay the exhorbitant cost of living - wages have not kept up with housing and utilities and all those things. The responsible young person who has been able to keep on top of their credit now gets married and has a young family. They have decent jobs but still can’t quite make it. The baby needs diapers. Out of money and food before the next payday. The car breaks down. Dental work and no insurance. The Visa is there and you have the endless optimism of youth that your marriage will stay together and your job will get better and wages finer. It will be okay.
What you don’t understand is there is a tipping point. They have it set up for you to lose your interest rate over a late payment. Credit card companies can do anything they want to you and once you have the almighty credit rating going down everyone can jump on top of you like a dog pile. Everything from monstrous interest rates to payday loans they have it all waiting for people who have fallen into the pit.
Most of us figure it out by the time we have matured. I am convinced that is why advertisers love the younger demographic. They can be trapped just like 14 year olds can be enticed to smoke. When they finally understand what has happened to them it can take years to get out. It steals lives.
They stopped Ed McMann from sending out those sweepstakes offers because unsuspecting people might really think they had won the sweepstakes yet every credit card company can start on you when you are 18 years old to ensnare you for decades. I work with young people some people automatically gravitate towards economic things. Many do not. It doesn’t come naturally to them anymore than being a scientist would be easy for another type of person. They are defenseless.
Those who should watch out for a choking middle class and a new generation who will spend much of there life indentured owe too much to the financial institutions to do anything to level the playing field. I commend you for making it a priority to speak out.
October 14th, 2007 at 8:02 pm
Annie, you have a very good point about the young adults being overly optimistic about life in general, so they just don’t heed the warnings of us older folks who have fallen into the trap and by some grace gotten out (or are still trying to get out). And the analogy to tobacco hits close to home for me…I am still trying to quit smoking cigarettes, after having picked up my first cigarette at age 15 (back in the “dark ages” when there was no age limit on buying them).