Why Americans are Slaves to their Debts?
As Americans fight a losing battle to pay off their debts, it makes one wonder — how did we get here in the first place?
The American dream, now more than ever, seems like a thing of mythology than an actual achievable goal. As more Americans work longer hours every day, it never seems enough because of the rising amount of debt.
But how did American debt get so bad? Aren’t we supposedly one of wealthiest countries in the world?
Now, it seems that whole world runs on credit. Countries, not just America, are spending money they don’t yet have; and its citizens are suffering for it. For the sake of perspective, here are just a number of bleak facts as to illustrate how bad American debt has become:
· An American can go through his entire life without having earned a single cent. — In the endless cycle of debt payment, a hard-working American can get an education, get a job, buy a house, buy a car, and still not be able to earn a single cent because all of his/her money goes into paying off the debts.
· Nearly half of the country has more debt than savings. — A lopsided economy and a broken credit system has given Americans very little opportunity to save up what they earn. This makes millions of American households vulnerable to a financial wipe-out in case of a financial emergency.
· Despite the worsening debt crisis, the government is still spending more than it’s earning. — In fact, the American government is spending close to about 50% more than the money they are bringing.
The reasons for the rising amount of debt?
· Jobs are going to non-Americans. — Job creation has always been a 21st century problem in, and it looks like things aren’t getting easier. Big name companies are outsourcing jobs that used to be homegrown. Labor in developing countries are substantially cheaper than in the U.S, so companies bring their jobs abroad to keep their profit margins high. But the same can be seen from within our own borders. Illegal immigrants in the United States continue to undercut Americans by allowing lower wages; leaving actual citizens unemployed and unable to pay their bills.
· Americans are spending well beyond their means. — But the average American isn’t absolved of blame. While Americans are statistically “poorer” than they’ve ever been, a majority are still spending on more things than they can afford. New houses, new cars, new phones, new clothes: everything can be bought on credit. But those things add up, and they can become a big problem financially when there’s no net to fall back on.
· Bad overall financial decisions from governments and big banks. — In the end, a majority of the burden also falls on both the government and banks for allowing so much credit to go unpaid. The recent burst of the real estate bubble sent the country into a sharp downward free-fall. As Americans are allowed (and often times forced) to spend more than they can afford, the economy suffers when they are inevitably aren’t able to settle their debts. In the end, everyone loses.
In a way, Americans have become a slave to their own debt. And it’s a ball and shackle that’s getting heavier with each passing day. And if bank creditors and government officials don’t get their act straight soon, it’s a problem that might eventually slap us with a bill that we won’t be able to pay off.