by Vernon Huffman

Created on: April 28, 2008

We're in debt because we spend more than we earn. This happens on many different levels. Let's look at three aspects of American debt - personal, societal, and governmental - in reverse order.

The US Government spends more money than it takes in taxes. Except for a couple years of the Clinton Administration, this deficit spending has been going on since Jimmy Carter's term, under Presidents and Congresses of both parties. Politicians have found it uncomfortable to raise taxes or cut spending, especially when it would have a negative impact upon the big corporations and high rollers who pay to get them elected.

When the national debt was about twenty percent of what it is now, it was the largest debt ever accumulated by any human institution in all time. As long as people are willing to extend credit, it can keep building, but the dollar itself is only based on faith in the US government. We're beginning to see the value of the dollar slip as people lose that faith. There is no plan to pay off the debt.

Besides our government's borrowings, our society consumes more than it produces, creating a trade deficit. No other people have ever lived as lavishly as the US population now does. If everybody on earth consumed as much as we do, we'd need at least three more planets to provide the resources. It seems unlikely that the rest of the world will be able to afford to carry us much longer. We will probably be forced to live at a more sustainable level soon.

You are probably more familiar with personal debt. Only about one half of one percent of the American population will earn more interest on their savings than they pay on their debt. Nearly all of these elite few were born fabulously wealthy. The rest of us pay them, through various institutions, for being richer than we are.

Until the early 1980s, usury was a crime in every state of our union. Only "loan sharks" associated with criminal syndicates charged more than 10% interest, and these mobsters were pursued by the FBI. But the banks lobbied each state legislature to eliminate these laws and created an industry that profits from pushing people into unreasonable debt. What these bloodsuckers lose to bankruptcies, they make up by draining the savings out of middle class households.

In summary, we are living in a house of cards. With the sub-prime lending crisis, the debt bubbles have begun to burst. When the Saudi oil field collapses and the Chinese stop lending us money, the crisis will accelerate substantially. Perhaps the impending crash will precipitate a global jubilee (Leviticus 25), allowing us all a fresh start. Meanwhile, I offer three pieces of advice.

1. Practice getting where you need to go without oil, by walking and bicycling.

2. Learn how to grow your own food and a little extra to trade or share.

3. Get to know your closest neighbors well; you'll need them.

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