The psychology of debt

The Psychology of Debt
Manas Hardas
July 20, 2008

Being in debt in America is different than being in debt in any other country. In India where I come from, being in debt was something not to be embarrassed or ashamed about but something to be horrified about. Shame doesn't inspire you to act positively, it depresses you into doing more wrong things and digging a deeper hole. Horror inspires you to act and save yourself. Maybe that’s why farmers in India are committing suicides by the hundreds. The horror of the situation is driving them to extreme steps. But the same situation is confronted by Americans by driving themselves more into debt and bankruptcy. Maybe it’s shameful, but shame is a very easy way out. So is suicide, but the path to reaching this decision point is completely different. This could be a gross generalization, but I am just relying on my observation and knowledge.
See in America, just to survive you have to be able to work the system. If you cannot then you are destined to fail. First financially, then socially and then psychologically. The system is designed in such a way that, unless you play along you have no chance of survival. I am talking about 90%+ population which have average to below average incomes, with at least one credit card and at least some debt. It is not possible to have a credit card and no debt. It is simply against the system. So coming back to the point, when you think you can work the system, in actuality the system is working you. The system is forcing you to play by its rules by forcing you to work itself. For example, say if you had a 1000$ debt on your credit cards, and you successfully paid it off over a period of time and are very proud of yourself for working the system and paying off your debt. Of course it is something to be happy about, but then is it really? I mean yeah you paid off your debt, but in the process you modified you psychology into believing that you have to play by the systems rules and everything that is happening is normal. Credit card companies charging you 30% interest is just a part of the game. They are corrupt people doing it for a profit and they will do such things. After all they gave you credit when you needed it, didn't they! So now you have to play by their rules. Its just part of life. The American life. The Man is about to get you. And you have to fight the 'Man' to survive. It survival of the fittest. Indeed, its capitalism. And capitalism has brought us so many good things, hasn't it. For Christ’s sakes, now I can choose between 32 colors of toilet paper and 57 flavors of ice cream! The power of choice and Milton Friedman put it. The system always is the winner as it implicitly forces you to play by its rules. Even if you are winning, you are losing, because you are accepting the systems rules. The system doesn't care if you are winning. It just wants you to play by its rules.
The economic neoliberal policies in America over the past 50-60 years have created a class divide which will be impossible to rectify even over the next 100 years. And this is not because there are no people who understand this, it is because the psychology of the peoples has been modified into thinking that whatever is happening is supposed to happen. In my opinion it takes about 2-3 generations to get an entire population to believe in a value system. Maybe it takes more, maybe it takes less. But by merely observing the American way of life as it is presently, it certainly cannot take more than 100 years. So simple, if we want to see a change in the reverse, we have to start now and still it would take maybe 100 more years for observable results and then even that value system will have its own disadvantages. So is it worth doing it at all? Well for one, social progress has always been seeded in change.
The other way to bring about this change is of course, suicide.