In Debt or Indentured Part Nine: All the Issues

People Politico In Debt or Indentured: All the IssuesThis is the ninth part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: All the Issues

With all of these issues hitting the American middle class, it can be easily seen how people can become distracted from looking at the big picture since the picture becomes so blurred through media and politics. There is also the amount of work Americans do, they are left with little time to invest in looking into the politicians that they elect. President George W. Bush said to a divorced mother of three in Omaha on February 4, 2005 “You work three jobs?  … Uniquely American, isn’t it? I mean, that is fantastic that you’re doing that”. This should not be uniquely American to expect people to work three jobs and still barely get by. Not to mention, how much money does this struggling woman have to pay out of her three jobs to have her children looked after so she can work more? This is also an example of how politicians on both sides of the aisle think that Americans hard work is endless, yet the middle class does not demand change.

Is it audacious to think that the America middle class would demand remotely close the subsidies and tax breaks that industries and the wealthy receive currently from the government or be bailout by the government in the middle class’ time of need? The American middle class worker barely has time to demand more than a thirty second sound-bite from the politician that they will vote for…if they vote at all. A tactical attempt has been made by those in the echelons power within the United States to divide the middle class and ensure that they are more focused on surviving day to day, paying their debt, and living in fear than being able to see through the smoke filled barrage of sound clips and view the entire picture. Not able to see or feel powerless to change a government that is not serving them. The American middle class must find the time to challenge the status quo and demand tangible changes that would directly better middle class families’ everyday lives. To this point, instead of looking at the turmoil that middle class is experiencing, the American middle class is told they should not look for handouts from the government and they should take pride in pulling themselves up by their bootstraps (even though the entire financial system was bailed out to the tune of over a trillion dollars). The middle class instead is encouraged to spend more, even if that means going further into debt. An example of this was reported by Time Magazine’s Justin Fox (Editorial director of Harvard Business Review Group and author) in 2009 about statements made by then President George W. Bush directly following the September 11, 2001 terrorist attacks where President Bush stated, “Take your families and enjoy life, the way you want to be enjoyed.” Fox goes on to quote Boston University Historian Andrew Bacevich in his conclusion that “Bush seems to have calculated – cynically but correctly – that prolonging the credit fueled consumer binge could help keep complaints about his performance as Commander in Chief from becoming more than a nuisance.” Politicians, Democrat and Republican, will put their own aspirations ahead of those of the country unless a conscious society, predominately made up of the middle class as the majority within America, is willing to hold them accountable for their actions and words.

Common ground must be found by all American middle class indentured servants in order to free themselves from the this unjust system that has been built to keep the middle class in perpetual debt and fear. The American middle class must put partisanship aside in a time when it has been developed to a fever pitch. Democrats and Republicans cannot look in hate towards their fellow middle class worker trying to survive just as they are. It is time to rise up and demand a change within this country, a time to retire the debt that has burdened on their backs and buried a generation. If common ground cannot be found in the form of the self preservation of the middle class and the redefining of what the American Dream consists of, there may be no hope for this experiment with a middle class in America. But if common can be found and the political muscle of the American middle class can be flexed politically to demand changes that will help them directly in the form of debt relief, tax relief, living wages, educational equality and affordability, common belief that health is a right and not a privilege, and that fear can no longer be a tool used to control the middle class. If this type of unity can be found and the political will demonstrated by the middle class, there can be a redistribution of power in this country and the United States of America will return to a nation governed for the people by the people.

In Debt or Indentured Part Eight: Single Issue Voting

People Politico In Debt or Indentured Single Issue VotingThis is the eighth part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: Single Issue Voting

Another reason that the middle class has not unified to demand change from the government and subsequently their employers is that the American middle class has allowed their voices to be divided on the basis of single issues. These types of social issues have dominated American politics starting in the 1980’s with efforts to mitigate the effects of the 1973 Roe v. Wade Supreme Court decision that legalized abortion in America. The two major American political parties took strong positions supporting and denouncing legalized abortion in America. Through time there have been litanies of new social issues that have been added to the table to assist in dividing the middle class vote and creating a new type of voter. This new voter will vote on a single issue instead of demanding platforms that address their own personal issues that are affecting their everyday life instead of one single issue that the my only care about because of religious or personal convictions. Some of the issues that currently stifle America middle class voices are: abortion, stem cell research, gay marriage, euthanasia, gun control, and illegal immigration. The interesting thing about single issues or wedge issues is that when either party is in control of congress and The White House, little to nothing is done to change the issue. On the face it appears that there is a lack of political will to tackle such monumental social issues, but politicians on both sides ran with those issues central to their platforms.

There are many example of the bait-and-switch of wedge issues by both Democrats and Republicans. One for the Republican’s took place while controlling all of congress and The White House from 2003 through 2007. Almost every elected Republican took a stance in their run for office to work towards the limitation of abortion. Yet during this time period of Republican control, little to nothing was changed to limit abortion in America. This was done even though this wedge issue was used by most Republicans to motivate voters that saw this as a single issue to vote for. The Democrats did the same thing with stem cell research and gay marriage when controlling congress and the presidency from 2009 to 2011. This is sometimes referred to in political communities as pandering to the base or telling the base of the party what they want to hear. Once elected these politicians do not make it a priority to do anything about the issue until close to another election. This maneuver ensures a constant block of voters (mostly middle class) that will come out to vote for their party because the voter cares about this sole issue. This was seen with gay marriage and abortion in the U.S. Presidential Election of 2004 between then President George W. Bush and Senator John Kerry and again in the 2008 election between Senator John McCain and Senator Barack Obama. Even now in the run-up to the 2012 Presidential Elections, the sound of pandering to single issue voters are being displayed by both Former-Governor Romney and President Obama.

Middle Class Divided

The division of the American middle class is important to both major political parties which have unlimited funds now available to them through the Supreme Court ruling in the Citizens United v. Federal Election Commission that classes corporations as individuals protected by freedom of speech through the form of political contributions to individual candidates as protected speech, this reported by Adam Liptak for the New York Times in his article titled, “Justices, 5-4, Reject Corporate Spending Limit.” This decision now entitles corporations to spend as much as they like on political contributions to individual candidates (Liptak).  The dissenting Supreme Court justices warn, “allowing corporate money to flood the political marketplace would corrupt democracy” (Liptak). This ruling allows corporations to act as individuals in order further influence elections through money. All though as a corporation it will not be able to vote in that very same election since it is not a person or a citizen.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

In Debt or Indentured Part Seven: The Power of the Middle Class

People Politico In Debt or Indentured: The Power of the Middle ClassThis is the seventh part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: The Power of the Middle Class

The indentured middle class could look to the strong and cohesive group of Americans that have been able to establish Social Security as the third rail of American politics. Both Republicans and Democrats refuse to substantially change this very popular program for seniors since they have come together and will punish a politician of either party if they work against this program. This power comes through seniors vote in large numbers and they ensure that their representation understands that Social Security and Medicaid are widely popular programs for them and it should not be tampered with. But after elections, these same seniors stay involved by reaching out and reminding their representatives how important this is to them. In 2008’s presidential election, the forty-five to sixty-five year old voting block voted at a rate of sixty-nine percent. Voters aged eighteen to twenty-four year olds were now at only forty-nine percent as reported by Thom File and Sarah Crissey in a U.S. Department of Commerce Economics and Statistics Administration and U.S. Census Bureau report titled “Voting and Registration in the Election of November 2008.” It can stand to reason that politicians are not as concerned with the cost of higher education and the cost being incurred by young Americans that do not vote in the same numbers as seniors and will not hound them after the elections to help them. Since young people and many middle class voters do not invest the time to demand a change in their government, their government does not take time to look out for their interest either.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

In Debt or Indentured Part Six: The Middle Class

People Politico In Debt Or Indentured: The Middle ClassThis is the sixth part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: The Middle Class

The American middle class has evolved from a powerful voting block with a determination to succeed, advance their prosperity, and their posterity; into a class of Americans controlled by debt. Debt and fear has become the reasons middle class Americans continue to stay in dead end jobs, constantly going to work hoping that they can keep their job for another day. They will lose everything if they cannot keep their job. Worse yet, there are hundreds of thousands of Americans that will continue to work in a job because of their health and without their job, they will lose their health insurance and again will lose everything. The American middle class has allowed themselves to slip into a state of indentured servitude where they have become subservient and endowed to the corporations wielding the power in the United States.

Indentured servants are not a new idea in America as they were the forerunners of slavery in the South where the few possessed the majority of the wealth and land. These English land owners needed workers to cultivate the cash crop tobacco. England had a large population of poor living in filthy conditions on the streets in almost every city. The British government worked with the American colonist landowners to create incentives for people to have their travel paid for, room and board cared for upon their arrival in America, and all in exchange for working off the debt that was accumulated through manual labor on plantations. This was the start of an American dream. During this time period, there was very little land that could be acquired in England. If the indentured servants were able to repay their debt through their labor, the English government declared that they would be rewarded with land in the Americas. Thousands of English and Scots signed-up for the opportunity. Very few, however, were able to complete their servitude, with landowners changing contracts to ensure that the debt could never be repaid. The outbreaks of disease also added to their debt as payment was needed for medication or doctors to help them. The indenture servants were also working to gain land, which as a land owner entitled them to vote and be involved politically. For the few that were fortunate enough to survive through their servitude and looked to be a landowner, the English government decided that this land was proving valuable and declared that they could not give the land to the mere servants. This lead to an indentured servant revolt that was successful enough to take control of the Carolina Colony governor’s residences. This victory was short lived and afterwards the plantation owners began to look for workers at they could hold with even less rights…slaves.

The American middle class carries many similarities with the indentured servants of colonial America. The American middle class is in a state of indentured servitude where they cannot escape from the debt that they have acquired. Just like their forefathers and foremothers who came as indentured servants to this country to follow their American Dream, this generation of middle class Americans are being required to work under fewer and fewer protections both from their employer and government. As well, this class of American indentured servants is without a voice in their government. Though the American middle class has the right to vote, it is not used to its potential to radically demand change. The middle class does not seem to carry the will to sustain pressure on their representative to work help workers in taking on the behemoths of society. The rules continue to change in favor of big business and the indentured servants’ voice is stymied again. The American middle class has developed laryngitis and has lost its voice in demanding social change.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

In Debt or Indentured Part Five: Mortgaging The American Dream

People Politico In Debt Or Indentured Mortgaging The American DreamThis is the fifth part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: Mortgaging The American Dream

The American middle class has been sold an American Dream built on a foundation of debt, that encourages more debt, looks to remove the negative stigma of debt, so more and more Americans will be lolled into its promises of have it now and paying later. Unfortunately, the pay later has emerged through time to mean pay, continue to pay, and acquire more debt while paying more towards the debt already acquired. This in turn has created a middle class caught in a revolving circle that requires to constant income to support their debt and to have further credit they must also have constant income. This on its face value does not sound outrageous, but there is another factor that has become the key ingredient in transforming this seemingly symbiotic relationship the middle class has developed with debt. This ingredient has transformed the middle classes relationship with debt into a parasitic one. That key ingredient is fear. Fear of being jobless. Fear of being without health insurance. Fear of being unable to pay the debts. Fear of for the children’s future. Fear of not being able to keep up with the Jones’s.

Throughout the 1980s through the 2000’s the policy of Trickle Down Economics yielded no improvement for the American’s working class but it saw the richest Americans take much more of the slice of American wealth. The argument for lowered taxes on the top 1% is that this will lead to job creation through investment but the data does not support this. Professor of Psychology and Sociology at the University of California Santa Cruz G. William Domhoff explains in his article “Who Rules America: Wealth, Income, and Power.” Domhoff contends, “In the United States, wealth is highly concentrated in a relatively few hands.” In America today only fifteen percent of the country’s wealth is held by bottom eighty percent of workers (Domhoff). What is even more surprising is how few Americans seem to understand that there is a consolidation of wealth in America. Domhoff describes a Norton & Ariely 2010 study that ask over fifty-five hundred people to describe what they to be “the ideal wealth distribution” and a large consensus described a distribution “which the top 20% owned between 30 and 40 percent of the privately held wealth,” this being well outside of “the 85 percent that the top 20% actually own.” Domhoff continues the misconception of wealth distribution by surmising that those surveyed also believe “the bottom 40% — that’s 120 million Americans — should have between 25% and 30%” of the wealth ideally but believed that this bottom forty percent have “8% to 10%” which is “far above the 0.3% they actually had.” The information in this survey demonstrates how Americans have established an idea of how wealth is held in America but this idea is not reflected in the reality of power and wealth in America.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

 

In Debt or Indentured Part Four: Work Force

People Politico In Debt or Indentured: Work ForceThis is the forth part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: Work Force

The American middle class is facing this mountain of debt now with stagnant wages that have seen little to no increase in salary compared to the drastic increase in productivity. Frank Levy (professor of Urban Economics in the Massachusetts Institute of Technology Department of Urban Studies and Planning) and Tom Kochan (Professor of Management at MIT’s Sloan School of Management and Co-Director of both the MIT Workplace Center) in partnership with the Employment Policy Research Network (group of 150 academic researchers from more than 50 universities in the United States, Canada and the United Kingdom) published a comprehensive look at the American middle class and how the effects of stagnation are impacting the middle class worker. Levy and Kochan clearly make the connection between the middle class’s labor, wages, and belief in the American Dream when they summarize the current state of business as “The broken connection between labor and productivity growth and compensation growth for average workers has undermined mass upward mobility and the ideal of a growing middle class.”In short, American workers are being asked to do more work for the same pay and expect to continue to grow financially within society. All three of the ideals cannot exist at the same time. Levy and Kochan describe the evolution of large American corporations as “increasing their economic power and political influence” through and after the 1970s. Levy and Kochan state that these changes in business practice and ideology have lead to:

[S]ubstantial legislative changes that deregulated major industries, liberalized banking rules, undercut labor-law enforcement and reform, prevented increases in the federal minimum wage, and fostered an ideology of free-market liberalism and the ‘maximization of shareholder value’ at the expense of other stakeholders. (p.4)

This has lead to a laissez-faire business environment that encourages corporate profits over anything else, including taking care of their employees, not just their executives. If the company can get more productivity out of less people…it will. If the organizations can require longer hours with no additional pay (salaried employees or moving to have a part time workforce)…it will. If a corporation can frighten and intimidate their employees out of collective bargaining…it definitely will. The strange thing about this radical movement by corporations is that it has been supported through legislation from the government and American middle class is still supportive in large numbers towards decreasing regulation for corporations favoring a belief in pure capitalism.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

In Debt or Indentured Part Three: Healthcare

People Politico In Debt or Indentured HealthcareThis is the third part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: Healthcare

Understanding the debt that will be incurred through education, a mortgage, and credit cards to a certain extent can be prepared for or at least decided upon as the benefit outweighing the cost of the debt. The unexpected has become another trove of debt for the American middle class especially in the form of health care, health services, and chronic illness. The Washington Post columnist Sarah Lovenheim in her article titled “New Study: Bankruptcy Tied To Medical Bills” reported that as of 2007 sixty-two percent of all bankruptcies in America were related to medical expenses. Within that sixty-two percent is a surprise, eighty percent of those that filed for bankruptcy were covered by insurance (Lovenheim). Even though many middle class families feel that it is critical to have health insurance to protect them and their families if sickness or an accident were to strike, this insurance oftentimes will not cover the entire cost of the care required. Couple the out of pocket cost to afford health care insurance with the deductible costs if the insurance is used, and add in the maximum payment from the insurance company, then compound this all with the rising number of Americans living with chronic illnesses and a picture of a middle class struggling to hold on to a system that is failing them clearly emerges. Again like college grants, Medicare and Medicade have been established  to assist the elderly and the poor a while the middle class is left holding debt for all of their expenses since they make too much for help from the government and not enough to afford the care they need.

Healthcare in this country is a huge problem and we will look at this topic specifically at a later date. For now, just understand that sudden, unexpected and even protected healthcare issues can be absolutely devastating to Americans on top of everything else we must endure.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

In Debt or Indentured Part Two: Education

People Politicon In Debt or Indentured - EducationThis is the second part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: Education

Another way the many middle class families have come to see the equity in their house is as a way to afford higher education for their children. As tuition prices for university and college educations have continued to explode, it became unreasonable for American families to be able to just save their way to a higher education for their children. Instead of demanding intervention from their government, the American middle class looked to their hidden savings in the form of home equity. For those that did not own their own home though the options dwindled to scholarships, grants and loans. With availability limited for students to receive scholarships and grants, many students are forced into borrowing in order to gain their degree. Writer and Editor Marcia Clemmitt dives into the ways which college pricing and affordability have changed over the past three decades in her report “Student Debt Is the College-loan System Fair?” Clemmitt observes, “Many analysts call current education-debt level truly alarming, arguing that college loans saddle students with long term burdens that can affect their choice of jobs and ability to shoulder other responsibilities such as mortgages.” The fear of analysts exemplifies that, as soon as, those students graduate from college, they have debt already strapped to their backs. Interestingly, these analysts are not only worried about the graduates’ ability to chose the job they want but the analysts are concerned that these students will not be able to get into the next big debt adventure for many adults…a mortgage.

The facts behind rising college costs are murky at best, but much has been attributed to state budget constraints and rising costs for services. Regardless of the reasons for the ballooning costs, student loans have far exceeded them by rising 375 percent from 1982 to 2005 (Clemmitt, 879). The debt being incurred by middle class Americans is phenomenal with total college debt surpassing America’s credit card debt in 2010 (Tompor). Part of the reason that college debt has become such an issue for the American middle class families is because there are safeguards in place for low-income families where they qualify for government grants and financial assistance. On the other hand, most middle class families do not qualify for these subsidies from the government and are instead made to rely on loans to pay for their further educations (Clemmit, 880). This has meant the cost to graduates has been growing substantially and as reported by Justin Pope for The Huffington Post titled “Average Student Loan Debt: $25,250” the debt for the average student is a large burden to leave school with. Graduating students were also met with nine-point-one percent unemployment (Finnegan). Priming students to become accepting of debt has been what the American middle class has come to embrace as their trade-off for participation in the American Dream.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

In Debt or Indentured Part One

People Politico In Debt or IndenturedThis is the first part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured – Introduction

The American middle class is now swimming in debt that is pouring in from every direction. The middle class is faced with stagnant wages coupled with inflationary prices on energy and food, health insurance costs that continue to grow well beyond the rate of inflation, education debt, exorbitant cost of child care, and a dwindling number of well paid job prospects even for those that have higher education. These aspects coupled with The Great Recession have driven workers to stay in jobs that demand longer hours and with more tasks at the same rate of pay. Fear of unemployment and the debt that they owe has driven many American middle class workers to feel lucky to just have a job. They do not speak out because of their debt that they owe on credit cards, car loans, mortgages, and the steadily rising educational debt incurred by today’s students. With bankruptcy law changes that were heavily lobbied for by the banking industry and credit card industry, have made it virtually impossible for average Americans to qualify for bankruptcy bargaining to reduce the most of common middle class debts.

American household debt has been on the rise as credit became more available to middle class workers during the mid 80’s, 90’s and the first half of the 2000’s. With this new access to credit the Americans middle class families just as their government began to spend well beyond their means. Associate professor and Department Chair of Personal Finance and Planning at the University of Missouri Robert O. Weagley reported in an article for Forbes Magazine titled “Big Difference Between Chinese and American Households: Debt” that “The average US household debt is 136% of household income […] if we include federal borrowing, the United States number increases an additional $109,792 per household, to $224,303 per household or 266% of average household income.” This is a dramatic number that demonstrates how the American middle class has become reliant on cheap credit and borrowing. Professor of Economics at New York University Edward N. Wolf explains in his working paper “Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze—An Update to 2007” that “Indebtedness, […] skyrocketed in the early and mid-aughts [2000’s]; among the middle class, the debt-to-income ratio reached its highest level in 24 years.” Acquiring debt in America has not only established a way for Americans to live outside of their means through the use of credit cards, it has become blasé to go into debt in order to pay for a college education, afford transportation, buy one’s house, and even make daily necessity purchases. This has not always been the case in America.

Credit card debt in America exploded during the 1990’s through to the beginning of the Great Recession when credit became scarce and liquidity dried up as banks became unwilling to even loan to each other in fear of what bad debt the other bank might be holding. During this time period of easy qualification and exorbitant credit limits being doled out America’s binged. Writer Susan Tompor reported in her 2010 USA Today article “Student loan debt exceeds credit card debt in USA” that revolving credit in America stands at $828 billion, this included credit card debt. As Americans have become more accustomed to hearing numbers in the trillions, this number may have lost some of its sticker shock, but to put that into prospective, this is $2,760 owed by every man, woman, and child in America (based on a citizen population of 300 million). Although new lines of credit have been reduced following the financial collapse in 2008, existing borrowers have continued to use their credit cards. Karen E. Dynan and Donald L. Kohn said it well in their Federal Reserve report, “The Rise in U.S. Household Indebtedness: Causes and Consequences.” Dynan and Kohn claim “substantial evidence suggests that households are not always fully rational when making financial decisions” when discussing the American willingness to go into debt. Though Dynan and Kohn are primarily focused on housing debt they identify one of the reasons Americans have been willing to use credit cards so frivolously. The drastic rise in housing prices through the 1990’s into the mid 2000’s gave a false impression to many middle class American families that they were richer than they actually are (Dynan and Kohn, 6). By seeing the equity in their housing as actual banked money, many middle class Americans lived well outside their means knowing that they could refinance or sell their home and still end up with a net profit overall. This of course turned out to be a folly when housing prices plummeted during the economic down turn leaving many home owners upside-down in their mortgages.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

2012 Presidential Race Begins in Earnest

reflecting-fountainWith Rick Santorum ending his bid for the presidency in the 2012 election, the real race for the presidency has begun.

Are you excited? I hope so. I hope the nasty vitriol of the past year coming from both parties (ironically a lot of it from the GOP, aimed at their own party) has not soured you on the process. If you are a normal person it probably has. I guess that’s a good thing, at least it shows that there are still people out there that get disgusted by the inhumanity that we see in candidates when they are trying to defame each other.

During this time of terrible turmoil in America, we need to have leaders that are fighting for America, and not just their own political parties. We need leaders that are willing to work with each other to progress the United States into its next great chapter. We need a government that fights for equality in all of its citizens.

So even if you are already sick and tired of the mountains of trash talking, misleading, finger pointing and hypocrisy I urge you to take a deep breath and keep on plowing through the political general election season. Now is not the time to give up and toss in your vote to whatever “side” you think you are on.

Now is the time to time to kick up the heat. Now is the time to push all potential presidential candidates to come forward and be truthful about what they have done, what they stand for, and what they most want to achieve. It is time to call them out on the pandering and political positioning.

We now know that the main contest is going to be between the incumbent, President Barack Obama, and the GOP front runner Mitt Romney. It doesn’t mean these two will be the only choices, though. There are a few others that will still likely be running, including Ron Paul. Dr. Paul has quite a bit of support. And there will be others.

We have six months and change left to go before the general election. We have been inundated over the last year as the GOP goes through the long and arduous process of selecting their nominee to run against President Barack Obama. Now the real fight is going to begin. If we think it has been ugly to this point watching the Republicans go at each other’s throats, imagine how nasty it is going to get when the different parties start attacking each other.

Now is the time we need to pay attention. Now is the time we need to call them all out for their pandering and misdirection. Now is the time to hold the media accountable for their reporting.

A Civil Tongue in Politics

A Civil Tongue in Politics

Now is the time we need to be sure that we are using our heads, not our hearts, to follow this political struggle. The gloves are coming off and we need to be ready. We can’t let them push the people out of the debate. We can’t let them marginalize the citizens of the United States. We can’t let their unfounded lies go unchecked and unchallenged. We have to make sure that the truth of what and who these politicians are becomes common knowledge, not what one party or the other wants us to think.

We need increased honesty, integrity, and accountability in all things revolving around politics. We need to be sure this process becomes better. The only way to do that is to make sure that we, The People, shout out loud and proud that we are fed up with the declining and dysfunctional state of our political environment.

This can happen if we come together as a unifying force for truth in action, accountability for inaction, and serious repercussions for those that find it easy, more fun or entertaining to degrade, slander or otherwise defame each other. Responsibility, respectability, and courage are needed from everyone involved to make this a reality.

I will stand up, speak out, and form my opinions based on fact-based reality. I will not shut my mind to differing opinions and ideas of others. I will keep the discussion respectable and open. I will work to find common ground between those around me. I vow to be a better citizen, will you?

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