Debtoholics

This article from Maclean's shows the sorry state of a typical middle-class family with poor money management skills whose ambitions for affluence exceeded their income-producing capacity. Stories such as this one are becoming ubiquitous as ever more households suffering from job loss and overindebtedness careen toward bankruptcy.

At least one organisation - Debtors Anonymous - looks at using debt for spending as a seductive but destructive process. We wonder how much of the current economic woes result from people having a serious borrowing problem.

It was, after all, the sub-prime mortgage fiasco that set this whole Depression thing rolling. People become bad credit risks (sub-prime) because they don't manage their money well. Often that results from compulsive borrowing and spending.

We suspect that the damage to the borrowing class as a result of the Depression will be so dreadful that everyone now living will be very cautious about borrowing any money ever again. This development would be horrifying to the financers of consumerism and their minions (a.k.a. the Government and the Media), so we expect a tremendous push to coax the populace into perpetuating their spendthrift ways. The recent hatchet piece by Newsweek is a good example.

We hope that the people will not be so unintelligent. Happily, savings rates are rising, and household debt is falling. Unfortunately, there is a good chance that a false spring of recovery will get the masses borrowing again. But that will be the last hurrah for the debtoholics.