I've not yet been down to see the Occupy Philadelphia protest, though I hope to do so before the weekend is out. But reporter Kia Gregory has been down there this morning, Tweeting her observations. This one particularly struck me:
The Tea Party movement, you'll recall, began with Rick Santelli's famous rant against "losers" who'd fallen behind in their mortgage payments, defying the Obama-led government to do anything that might lessen the burden of those mortgages—because, after all, taxpayers shouldn't be on the hook for the unwise choices made by millions of individuals.
Admittedly, I think one of the wisest choices I made during the middle of the last decade was to not buy a house—despite a fair amount of peer pressure to do so. On the surface, there was plenty of reason to do so: I (at the time) had a solid career, loved the community was in, and expected to stay there a long time. Still: Buying a house looked likely to put me $150,000 or more in debt. An older colleague mocked me for my fear of such a substantial debt, suggesting I was avoiding the rites and even responsibilities of adulthood. But when circumstances changed—and then became more challenging—the lack of that $150,000 albatross around my neck gave me and my family a lot more freedom to make choices. The Philadelphia cardboard sign makes a really good point, it turns out.
But it's not been so long since we, as a society, had a very different attitude. Granted, it's an attitude my generation's grandparents—Depression-raised as they were—didn't seem to share. Debt wasn't a burden—it was "leverage," a way to get ahead, to "invest" in education or housing or (less crucially) a better SUV. If you could pay for those things with your own resources, super, but as my older colleague seemed to suggest, you were behaving counterproductively if you didn't take on the debt to get ahead.
Now, in a time of depressed housing prices and a high unemployment rate, that debt seems less like leverage and more like an anchor. I'm not sure what responsibility society—and taxpayers—have to the people who are now crushed by that burden. But society is not blameless in creating the problem in the first place. And I do suspect that the economy as a whole won't start to really move forward again until people feel like they can afford to buy stuff again (stimulating demand) instead of paying off their credit cards. There are probably two ways of doing that: Helping out the "losers" now, or settling in for a lost decade or more.
There is no freedom in debt. So what should we do about it?