The New York Times has a profile of a couple who are up to their eyeballs in debt, lots of it on high-interest credit cards. The slant of the article is that their problem is something that is happening to them, not that it’s something that they are doing to themselves. Now I’m no fan of the banking and credit industries. Their practices are often deceitful, predatory, and usurious. For instance, lots of folks have been roped into signing questionable mortgage instruments. (The interest-only loan is a good example.) But where is the personal responsibility in this profile? Where is the simple recognition that the couple in question is living beyond their means?
For the Moellerings, juggling balances and interest rates has enabled them to pay for things they could not otherwise afford, like their 2004 wedding and house renovation, or to eat out occasionally, when “we’ve both had a bad day at work,” Mr. Moellering said.
This is just plain wrong, and eating out occasionally is only a minuscule part of the problem. The truth is that they can’t afford a big wedding and a house renovation. And being financially unwise, when crunch time comes (typically in the form of penalties on top of penalties, some of which are avoidable if they learned to manage things better), they apparently turn to their credit cards rather than refuse further purchases.
If this profile is representative of typical American couples/families, and I suspect it is, then a lot of people are in for rude awakenings when their bills come due and the only recourse is declaring bankruptcy. Recent reforms to bankruptcy law, however, no longer allow escape from debt. They will still be on the hook for their inability to say “no” and live within their means. It might be easy to blame the media, which sells the good life and the expectation that home ownership, large screen TVs, and Caribbean vacations are within the reach of all of us. But the disconnect from reality that this couple exhibits is ultimately their own responsibility.
The Spiral Staircase 
Part of the problem, I think, is that many of us grew up believing the apocalypse would occur long before our credit would ever run out.
So instead of leaving an inheritance for our children, we leave our debt?
An all-out apocalypse would free our children from any debt, too. We’d all be dead. This does not make indulging ourselves beyond what we’ve earned morally right. You’re position is indisputable there. Few souls, however, confine themselves to such strict standards. Maybe blame wields the same clout whether it falls on deaf and dead ears or ears still able to burn with shame–the same clout but not the same sting.
Juliet Schor, in her book “The Overspent American,” has many good things to say about this. Americans apparently set their level of spending to the families they see on TV, and TV has grossly misleading representations of how ordinary middle-class people live. (One exception may be “Everybody Loves Raymond.”) Her suggestion is that to avoid ramping up spending, you should spend time with people who earn less money than you do. Obviously, as Kant would point out, you cannot universalize that maxim.
Still, Brutus is right: people need to practice a little delayed gratification, or the next generation is in big trouble.
Schor is a sociologist and must certainly have interesting things so say about the phenomenon. (I haven’t seen her DVD or read her book.) The notion that it’s actually good to live in debt and beyond one’s means is old and rather counterintuitive. I know, for instance, that it appears in Tolstoy’s Anna Karenina. But good for what? Not for people (not really), animals, the environment, etc. Rather, it’s good for the financial wellbeing of institutions (primarily corporations and states), but that’s not exactly a primary social good, or at least it shouldn’t be.