The Ancient Greek Philosophers Were Right: Debt Has Become a Modern Form
of Slavery.
Key Points:
- It’s not just about debt and the economy, it’s about not having enough money to pay for the basics.
- Being broke is different for everyone. It’s a ’50 degrees of brokeness’ situation. Young and old, all demographics are at risk.
- Serious debt accumulation starts long before it becomes serious. It took me 20 years of accumulated debt to realize this.
Most of us are in big trouble financially. We are running up personal debt unseen in modern history. I know I did. In the course of my last three years before finally reforming myself, I bounced checks, lost my house, my job and in the end, my self-esteem. I had no money. I wasn’t alone. In grocery stores I watched people slip past self-check-out machines with unpaid bags of food.
I seemed to notice more people buying stale-dated items from the discount trolleys. I walked past homeless people as well as women and men begging for a few dollars beside banking machines. It shook my core to see reasonably well-dressed people asking me for cash when I hardly had any of my own. I saw the potential for myself in them until I joined a debt recovery group for help with my own demons. I wrote about my own experiences in my book Debt Slavery, as a way of helping others. In the course of writing it, I reflected on how close I’d come to complete financial self-destruction by incurring chronic debt.
At the time of writing over eighty per cent of Americans that are living paycheck to paycheck, are unable to meet modest financial obligations. The same is true of Canadians followed by Australians at forty per cent. What this means is that, using the American example, is that eight out of ten people can’t pay their bills. This is what is happening around the world. The majority of people aren’t making enough money to survive.
This of course, does not include the ultra-rich, the one percenters who actively participate in the market economy or the technology stock markets – making more money in a day than most of us in a year. In case you might not believe this, here are statistics:
Average credit card debt in 2024
| Figure | Amount |
| Total credit card debt, Q3 2024 | $1.166 trillion |
| Average credit card debt, Q3 2024 | $6,380 |
| Delinquency rate of all credit card loans from commercial banks, Q2 2024 | 3.25% |
| Flow into early delinquency, Q3 2024 | 8.79% |
| Flow into serious delinquency, Q3 2024 | 7.10% |
There is variation to everybody’s situation. We’re not all in exactly the same precarious financial position. I view the general syndrome however, as a ‘50 shades of brokenness’ problem. Some of us are cutting back on expenses, while others are considering filing for bankruptcy. Some are giving up second cars, cottages and the yearly vacation in France, while others, an increasing number of others, are living in government subsidized housing for the first time in their life.
What is going on? There are of course many ways to answer this. It’s about the economy and wages (It’s about “the economy stupid”) – is one argument. The second one, which I am primarily concerned with, is about dysfunctional human behavior that leads one into debtor’s hell. Oddly though, you might hear a great deal about the need for increased financial literacy training in schools and at home as a panacea for current personal debt levels. But this is not enough. Financial literacy deals with financial technicals, the formulas for analyzing profits and losses, for example.. What’s missing is the deeper behavioral understanding of human behavior and money.
In other words, financial literacy doesn’t account for human behavior. It would be useful if it did. Incurring debt, like I did, started and continued because of my baked-in attitudes and perceptions that started long before I ended in in recovery programs. It took me twenty years to get into serious debt, and four years to climb out of it.
References:
- Almenberg, J., Lusardi, A., Säve‐Söderbergh, J., & Vestman, R. (2021). Attitudes towards debt and debt behavior. The Scandinavian Journal of Economics.
- Kotzé, L., & Smit, A. (2008). Personal financial literacy and personal debt management: the potential relationship with new venture creation. The Southern African Journal of Entrepreneurship and Small Business Management.
- Kennedy, B. P. (2013). The theory of planned behavior and financial literacy: A predictive model for credit card debt?.
About the Author:
Reformed Debtor is an anonymous American businessman & author of “Debt Slavery” – whose personal account of his debt slide and recovery is a cautionary tale for all.
His candid, no fluff, no jargon account of how he got himself out of $200,000 worth of debt – without declaring bankruptcy – is a refreshing and deeply honest look of how he succeeded.