Calling All Bets

David Brooks implies in his column today that American society is imperiled as a result of a dramatic increase in debt and the loss of frugality and industry as virtues in American culture. No doubt he is right that debt has increased noticeably in the past few decades, but I would be surprised if its recent increase represents an increase in the rate of increase. In other words, debt has always been increasing --- a rather predictable outcome of our capitalistic society that runs on credit and speculation (a lesson I learned painfully a few years ago, when i was informed my credit score was horrible because i had no debt). In fact our country has always run on speculation. George Washington himself speculated on land.

He argues that the 'dramatic increase' in debt in our society (assuming for the moment that the rate has increased dramatically) is destructive because it "inhibits social mobility and ruins lives." Unfortunately he does not back this up with any evidence, leading us to speculate as to the bases for this assertion. Such a simple diagnosis seems a bit naive for such a complex problem, and I wonder if the increase individual, family, and governmental debt over the past few decades is the result of a lack of social mobility, instead of the cause. Or perhaps it's more of a chicken and the egg thing. Regardless, I'm fairly sure this is not quite as well thought through as David Brooks would like to think.

Despite the weakness of the argument presented (I won't go through the whole thing), there is something compelling about the call to action. The 'debt society' as some have called it is an issue of significant national concern, contributing as it does not only to the precariousness of the economy but also to the undermining of reasonable expectations and thus the general happiness and contentment of Americans. This is my main concern, and what draws me to the subject. The average American should not expect to leverage his finances and gain money --- the virtues of industry and frugality are ones that have stood the test of time, and should not be allowed to pass without serious consideration.

However, it should be noted that many of the founding fathers, that David Brooks refers to as establishing this Puritanical backbone for our country, did not walk the walk. Though they proclaimed the virtues of frugality and independence from creditors, many themselves lived well beyond their means on a regular basis, most notably Thomas Jefferson. Debt and speculation have been part of the history of this country since its founding. It's not really its presence that is the problem, but the rather its prevalence and standing in our society. Because you never know when the debts are going to be called in.