What is debt?

Of course we all know what debts are, don’t we? We got ’em, if we’re breathing. Not all debts involve money. We all owe some sort of debt to our mothers for carting us around behind her belly button for nine months or so. You know, a debt of gratitude. Depending on whether you’re currently being audited by the IRS, or the lawn needs mowing, this feeling of a debt of gratitude might mostly disappear.

Forget gratitude. It’s been hunted to extinction anyway. Let’s just talk about money debts here. A mortgage on a house, a loan to start a business, that sort of thing. You get a lump sum right up front. You pay it back over time, or in a lump sum later, or maybe not at all if you kick the bucket or go in the witness protection plan or go bankrupt or some other smart move.

I’d really like to talk about the motivation for incurring debt, which has changed a great deal in my lifetime. Borrowing was once described to me a sign of hope for the future. A married couple bought a house using a mortgage, for instance, in order to have a place to pull down the shades and chase each other around and eventually fill the extra rooms with children. That’s hope for the future.

Likewise, you might use a car loan to get a reliable vehicle. The reliable part was the hope for the future. The car was supposed to last long enough to cart you back and forth to work, especially, and to fetch cans of beans at the store, and take your potential children to T-ball games or ballet school or whatever. The car was an asset whose value far outstripped its cost, or you wouldn’t buy it. A good car also allowed you to live further afield from benighted cities, out where the land was more plentiful and houses were much cheaper. Seeing how many years you could drive a car after the loan was paid off was more fun than driving on the highway with the needle on empty to see how much farther you could go before you chickened out and got gas.

A loan to attend college was ostensibly to increase your lifetime earning capacity. You’d borrow now and pay later out of the larger salary the resultant credential would attract. Parents saved money, and often put up their homes as collateral on loans to educate their children. That’s hope for the future.

Many times, people put up assets like real estate, insurance policies, and other valuable stuff to get a loan to start a business. That’s another excellent example of hope for the future. The amount of hope required is inversely related to the amount of experience you had in the business being established. People who really knew what they were doing looked at everything with a gimlet eye, borrowed as little as possible, and built on the foundation of their experience. People with lots of hope and little business acumen opened ice cream shoppes in Maine in the winter and wondered why the cash ran out before they sold their first cone.

This is all dead as a Pharaoh. No one takes on debt as a form of hope for the future now. No. Bud. Dee.

In my neck of the woods, there are two $80,000 pickup tricks parked in front of every $70,000 single-wide trailer. The trucks are expensive status symbols, not useful transportation. Men who use their trucks for real work drive rusty beaters. The loan to purchase the new trucks is the actual product. The truck is an afterthought. No one pays off the loans. The only way out of interest hell is to roll the loan into an even bigger loan in a few years on another silly truck, written by the same hyenas that wrote the last one. People could commute to whatever jobs they might have in a Kia, but the truck gets bought because truck.

A loan to attend college is taken with no inkling that it will ever have to be repaid. The education itself is superfluous. For most students, it’s a four or five year symposium on how to clutch a Solo cup. The idea that the credential it produces should enable the holder to acquire and hold a job is so disconnected from reality that they’re becoming unrelated. You go to college because you go to college, that’s why.

A house is no longer considered the engine of salubrity and stability for a nuclear family. It’s a kind of Ponzi scheme you can eat cheetos and watch TV in. You’re supposed to find a bigger sucker within about seven years to buy it off you, and get a bigger house in the bargain. The idea of staying in a dwelling long enough to pay off the mortgage(s) is considered absurd. The loan is the product, the house is an afterthought.

It’s been ten or fifteen years or so since the Great Recession, but jingle mail will make a comeback when people get ten cents underwater on their mortgages again. No one has much of an attachment to a house anymore. The house is probably stapled on the ass end of the garage. That’s the tell. Leaving the house is already the first thing on everyone’s mind. They never even form much of an attachment to the other humans who live in the house with them. I don’t know why they call it “gay marriage.” Is there another kind, anymore? People couple and uncouple like stray cats. They’ll fight over the dog, though, when it’s time to light out.

Revolving debt is supposed to make payments over time more convenient. Credit cards weren’t economical ways to borrow when the interest rate was in the low single digits. Fast forward to today. No one plans on paying off an unsecured loan at 29%. No one plans on anything, really. They want something now, and as long as the card still works, they get it.

It would seem that when angel investors and venture capitalists lend money to fledgling businesses, that would qualify as useful loans, if speculative. No way. They’re not loans. Those rounds of raises are the modern day letters of marque, not loans. The investors are funding virtual pirate ships, and they’re at war with everybody. Startup companies show pitch decks to attract investors, and they all say the same thing. There’s a giant market for X, and we can use the internet to take it without paying. Google promised to steal the yellow pages, Facebook promised to steal every bit of advertising the newspapers used to glean for their content. Look at any business with an app on your phone and ponder a bit, and you’ll remember what useful businesses they stole using a little javascript.

The perfect poster child for this method of flensing the meat off of everything without paying is Open AI, and every other large language model. They scraped every bit of information off the internet, and then will sell it all back to the people who wrote it in the first place.

So borrowing money used to be a sign of hope for the future. Now it’s a sign that there is no future, so let’s eat, drink and be merry. For tomorrow…

We’ll, I forget what happens tomorrow. We can worry about that later.