The Debt Binge

The following is a headline and a short clip from an article I read on ZeroHedge. It is a good article but, like all others, it doesn’t get to the root cause of the issue. The eventual outcome, of course, is well stated. I will explain the root cause.

“Americans are going into debt as if tomorrow will never come, but of course tomorrow always arrives eventually.”

Americans, like any other entities, are prone to looking out for themselves, especially, when up against the wall and without much hope left. Oddly, they never recognize that their betters reason the same way under parallel circumstances.

There is a certain mentality that says, “Since I am going under financially anyway, why not use what credit I still have to survive now and then default on my debt and let the bank eat it. After all, If my credit is going to be ruined, it might as well be for as much as I can possibly borrow.”

This is only one mentality. It is highly relevant. However, there are more ingredients involved. That is rational behavior.

The biggest influences are rooted in irrational behavior and those follow. The human animal is deeply prone to trust authority and seek guidance from his betters. This is instinctive behavior that was quite rational in evolutionary terms up until the 1700’s. During that period, the concepts of democracy and free markets evolved and began being used. Common men began to be of more utility to the elites as free entities as opposed to serving as slaves. The prosperity of all human beings has increased parabolically since that time period.  Today, the average person is mostly free intellectually and physically – but has not yet evolved mentally at deeper levels and still has an instinctive propensity to prostrate himself before a higher authority. What was for eons rational behavior now constitutes irrational behavior. Why is that relevant now?

It all translates in modern times to a strong propensity to view government as if it was a parent. Those who are borrowing, with every intention of repaying the debt honestly believe what they are told from government entities. None of it is true.

Statistics which measure unemployment, inflation and other influences are taken as accurate and true indications of economic forces. They are not. All government statistics are manicured and embellished so as to look as positive as is humanly possible. Modern central economic planning includes managing public opinion. This prevents folks from noticing what is really going on in the economic arena. It is very helpful in creating acceptable GDP numbers, to withhold and completely deny citizens information that serves them as tools for survival…. hence censorship of the truth. If ordinary people were exposed to the truth, they would seriously cut back and protect themselves from the coming economic disaster. The longer citizens keep spending, the better it is for their betters who manage what they know, understand and believe.

You hear the reasons for the strange borrowing behavior by the average person. I have just given you the real reason. That comes from living in the light of reality and finding root causes.

 

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