Grant Montgomery
Grant's Rants on the Economic Crisis

The Problem: Credit is the drug of choice

An entire generation of North Americans has grown up determined to live large and live better than they can afford. They buys things that they cannot afford and don’t really need with money they doesn't have.

Even some of the richest people on the planet routinely spend more than they make--and think they can continue doing so indefinitely.They go deeper and deeper in debt, believing they will never have to settle up.

 

Credit is the drug of choice of the modern world, far more widespread than any other. Individuals, companies and governments must have their fix of it, for they are addicted to it, and the withdrawal symptoms are too painful to endure. Life without credit means no future debt is possible, and often their present debt is so large and overwhelming that they cannot go on without another credit fix.

 

Like many drug users, however, they do not see that they have a problem. They're surrounded by other users who are in similar situations. "Credit and debt are just the way of the world, a necessity, and nothing to worry about. Everyone does it and no one's especially concerned about it. Besides, it feels good and helps make life more enjoyable. I need it. I've got to have it."

 

The problem is with not only the average North American family but governments spend money they don't have. For every dollar of product that the  United States sells abroad, it buys $1.60 worth of imported items. So every business day puts Americans $2 billion further beholden to its mostly-Asian creditors. If the nation were a corporation, such a business running such an imbalance for so many years would have gone bankrupt long ago. Only an imperial power with the world's reserve currency could have gotten away with it.

 

So citizens of most western countries are now in debt over their heads on time payments, everything from their house and their car, to their TV and furniture. And far too many thus stand to lose everything just like thousands did in the Great Depression.

 

America's empire of debt rests on many huge deceptions, amongst them:

·    That one generation can consume--and stick the next with the bill.

·    That the rest of the world will continue to take American IOUs forever--no questions asked.

·    That house prices would forever go up.

·    That domestic savings and capital investment are no longer necessary, nor does the United States need to make things for export.

·    That the American capitalist system is freer, more dynamic, and more productive than other systems.

·    That the virtues that made America rich and powerful are no longer required to keep it rich and powerful.

 

[Includes excerpts from EMPIRE OF DEBT, by William Bonner and Addison Wiggin]

Grant Montgomery: Grant's Rants on Credit being the Drug of Choice