There are two vices which all sane societies have historically outlawed: usury, and gambling. Those that have not done so have faced catastrophe. In particular the two practiced in combination -- gambling on the profits of usury -- have led to horrendous problems over the centuries: mass enslavement, famine, destitution, unrest, and even war.
A few of the more notable examples have been: Chattel Slavery, in which personal debt was inheritable from parents to children; Indentured Servitude, in which emigration to the New World was offered in exchange for a lifetime of labor; The Roaring 20s and ensuing Great Depression, in which banks loaned speculators money to invest in the Stock Market; and most recently, the Great Recession, in which adjustable rate loans were handed out like candy to bolster home ownership, and then traded like baseball cards on the floors of Stock Exchanges.
Why do I bring this up? Because our society will soon face a crushing and possibly civilization-ending economic unraveling brought about by those very same vices, which we continue to practice only a decade after the most severe recession of the 21st century.
As I stated above, the last economic recession was caused by mortgage loans, which were offered at adjustable rates. This meant the loan was only affordable so long as the price of borrowing on the open market was low. Once the cost of borrowing went up (which always invariably happens), the loans became prohibitively expensive to pay off, and the home was foreclosed, leaving its owner homeless. The entire mortgage was then written off as a loss to the bank, which would not have been a problem, except for the fact that mortgages, like everything else in capitalism, were traded (read: gambled with) on the open market. They had been bought up to the tune of trillions of dollars by practically every investment firm on the planet. Retirement funds, charities, governments, businesses, etc, all had placed bets on a strong housing market, and all stood to lose in some cases 100% of their financial assets. One corporation -- the American International Group (AIG) -- had offered "insurance" on most such investments, expecting to make an easy profit without ever having to pay out any losses. But suddenly in 2008 they "owed" their clients -- the global capitalists -- over a trillion dollars in financial losses. And they could not pay even a penny of it.
The American taxpayer came to the rescue, bailing out AIG with no-interest loans that they had until the end of time to pay back to the government. Capitalism, which had become predicated upon usury -- the practice of debt-enslavement of the poor -- was saved by the very people they had once preyed upon, and the economy slowly recovered over the next decade.
But the beginnings of the next financial crisis were rooted in the previous one. With massive job layoffs, tens of millions of young people from my generation --the Millennials -- had graduated to nothing. With white collar workers temporarily stealing burger-flipping jobs from the younger generations, there were no employment opportunities whatsoever. And so most young adults chose to avoid the job market entirely by returning to, or staying in, school.
To do this, they needed student loans. But the credit markets were frozen by the financial crisis. And so the government had to once more step in, or face an entire generation of angry youths growing up in poverty.
This is where the story takes an unfortunate and rather hypocritical turn, because Uncle Sam, having already bailed out the financial sector, was in no mood to be anywhere hear as generous to the Millennials, most of whom were poor. And so it instituted the very same practice that had doomed the American economy to stagnation in the first place: usury and gambling. Variable interest rate student loans -- the equally sinister cousin of adjustable rate mortgages -- were handed out like candy to Millennials. The student's ability to repay such loans was entirely dependent upon how employable they would be, as well as what the cost of borrowing was at any given point in time. And mathematically, it made no difference whether you wanted to be a factory worker or a doctor, because the more lucrative the profession, the more expensive the education would have to be. The loans were then securitized and traded in the world's stock exchanges, all of which were again insured by corporations hoping to make an easy profit without ever being financially liable.
And this is where we now find ourselves. As of January of 2019, there are $1.5 trillion in outstanding student loans, which grow at the crippling rate of up to 10% annually in a favorable economy. But unlike the housing crisis, there is no way for my generation to absolve itself of these legally binding debt obligations. We owe it in large part to our own government, and not even bankruptcy is sufficient to rid a person of it. In other words, my generation has become enslaved, just as the Indentured Servants and Chattel Slaves which came before us. And for many of us, there is no feasible way out. Unless the trillions we collectively owe is written off, and society accepts it as a financial loss, many of us will die with it still slung upon our shoulders, as the human property of capitalism.
The story of course does not end here. In fact, the story never really ends. But every chapter reads much like all the ones which came before it, which is why it is not too difficult to predict that this dilemma will eventually result in societal upheaval on an unprecedented scale. Millennial debt will either be forgiven, and the United States will enter the worst depression in its history, or our enslavement will continue, and this country will face an equally unprecedented and bloody insurrection fueled by anger and bitterness. The choice is ours to make.
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