Going into Debt—A Way of Life Now
HAVE you ever gone into debt? Did you ever borrow money, or buy something on credit and promise to pay for it later?
If so, you have plenty of company these days. Never before in the entire history of the world have so many people gone into debt.
The same thing is happening to companies, cities and to entire nations. They are all far more heavily in debt than ever before. As a result, the world’s present load of all types of debt comes to, not just billions of dollars, but to trillions of dollars!
Thus, going into debt has become an accepted, “normal” way of life. And more and more millions of people are doing it. But this present attitude toward debt is in sharp contrast to the attitude that past generations had.
Back then, most families felt that going into debt was almost shameful, something to be avoided if at all possible. People usually did without many things rather than go into debt.
Of course, in times past the way of life was not as complicated as it is today. And for most people throughout the world, an agricultural way of life prevailed.
For example, homes were far simpler in those days. In many countries forests were plentiful; so wood houses could be built rather inexpensively. In some nations, mud or clay was mixed with straw and used to build simple homes. In tropical countries, palm leaves or straw did the job. No great cost was involved with such homes.
For transportation, walking often was all that was needed. If faster means of transport was desired, a horse or a donkey might be used, or even a camel. Heavy loads were pulled in a wagon by an ox, a mule or a horse. Few families had to borrow any large sum of money to buy such items.
Today, all of that has changed dramatically in the industrial societies, and even in the cities of the agricultural lands. Pursuing the former simple, inexpensive way of life is all but impossible now.
In such places today, homes are far more complicated and expensive. Transportation is by costly automobiles, trains or airplanes. Trucks and railroad cars carry huge loads, but are expensive. So are office buildings, machinery and other equipment used by business concerns.
Nations arm themselves with highly sophisticated weapons of modern warfare. Why, a new type of submarine can now cost about a billion dollars! And governments provide many services for their people: police forces, fire departments, garbage collections, sewage disposal, street maintenance, water supplies, welfare and social-security payments, and many others. All of that takes a huge amount of money in modern society.
Few people, few companies, few cities or countries can save the money in advance to pay for all those things. So they borrow, thus going into debt.
Where individual debt is concerned, the loss of a job or other economic reverse can result in a person’s having to go into debt. Also, it is understandable that most people will not be able to pay cash for large items such as houses or automobiles.
But a vast and ever-growing number of people are going into debt for nonessential things. For example, just a few decades ago a television set, expensive radio equipment, a wide variety of appliances and other products did not exist. But now these are considered almost necessities.
To get these things right now, more and more people are willing to go into debt, hoping to pay for them later. The person who saves money first to pay cash is becoming a rarity.
But can the world’s free spending and heavy borrowing continue? Can debt be piled on top of debt without someday causing harsh consequences? Indeed, has the world’s debt load already reached the danger point?