Student loans

It starts with student loans--available to any student, pretty much without regard to whether their course of study will give them the skills and certifications that will produce an income to support the debt load.

Students with parents who are both generous and affluent can escape. (I largely did.) Students who are both unusually smart and unusually wise, or else are lucky enough to get very good, thoughtful advice, can escape. But most students come out of college with debts that lock them into the money economy. They have no choice but to earn enough money to pay off that debt--on top of the money they need to support themselves, of course. Even bankruptcy won't free them.

....

And that's just the beginning of it. The default path is to graduate from college and then get a job to pay off the student loan (and pay living expenses). The wise graduate might know that it'd be a good idea to get that loan paid off quickly, but that's still likely to take a decade. It's not practical to put your life on hold until then, so you proceed with all the ordinary aspects of living your life: getting married, having kids, buying a house--with the attendant mortgage.

Mortgages

Mortgages are no more evil than student loans. If you buy a house that's well within your means, a mortgage can be cheaper than renting.

But just like a student loan, a mortgage traps you in the money economy--you have to earn enough money to make that mortgage payment (and your student loan, and all the other costs of supporting your family), or else you lose your house.

I won't even talk about credit card debt.

The trap

This all works fine for most people, but it fails badly for some--for people who can't find work or lose their job or become disabled. It fails less badly for others--people whose degree prepared them for work that they enjoy, but that doesn't pay well enough to both support them and get them out of debt, or for people whose work pays well enough but that they don't enjoy. Overall, I'd say it fails to some extent for lots of people.


http://www.wisebread.com/wage-slave-debt-slave

There are all kinds of ways to support yourself besides working at a regular job. You can be self-employed, you can do freelance work, you can be a writer or an artist, you can grow your own food and make the things you need. Most of those ways won't support you at a middle-class standard of living, but they're an option. Except that they aren't an option to most people, because most people are in debt. And most people in debt can't cover their cash expenses any other way than by working at a regular job--those other options, although they can provide enough to eke out a meager existence, don't generate enough cash to do that and make the monthly payments.

The way out

In the end, debt and wages work together to trap the overwhelming majority of people.

It's hardly an airtight trap. You can buy your way out if you earn good money: Keep your expenses low, pay off those debts, get enough savings that you don't need to borrow again, start making some investments.... That path to financial independence is well known to anyone who reads financial blogs.

But it's a path that most high school students don't learn about. Most people only begin to understand when it's too late--after some young kid (i.e. them at age 17), guided by well-meaning but under-thoughtful parents, guidance counselors, and college admission advisors, have set them on the path to being locked into employment by wages and debt. Once you're there, it's a long hard slog to switch back to the path to financial independence.

One thing I'm sad about is that so many people who have managed to find the path to freedom have so little sympathy for the people who went badly astray. Granted, those who have just begun to find their way will be in the midst of difficult striving, but it somehow seems to me that should give people more empathy with those who, following the default advice, headed down the path of debt. In fact, though, it seems to give them less.

There's nothing wrong with debt and there's nothing wrong with wages. But I think the system we have now is pernicious. It makes sure that everyone starts out with a load of debt to trap them into working for wages at exactly the moment that they might otherwise be exploring other possibilities, and keeps them there until family obligations and a promising career make it hard to escape.

It's not impossible to escape. Wise Bread is full of advice, both tactical and strategic, for finding the path out of the debt and wage trap. Better if you never get trapped in the first place, but who among us has such luck? Who among us was smart enough or lucky enough or well-advised enough as teenagers to find the path to financial independence early? Too few.


http://www.wisebread.com/wage-slave-debt-slave

Yes Mother

Don't make her pull the car over!

Torgo won't stay on his side and HE IS MAKING THAT FACE AGAIN!!!!!

You are preaching to the choir, as I read your words.

In the old days, from ten years ago to forty years ago, roughly a thirty-forty year long stretch, this was a good idea. The young were shut out of the oversaturated work force, by being forced to get more and longer-taking education if they wanted a job, or a good job. The student loans made it sure they'd go to work after graduation, and not waste their education on drug trips to Africa or on sex trips to Bangcock.

But. The situation changed, and the system did not. Now we don't need workers. The money is there, the goods are there, and in my opinion no work is needed by the average bloke. But he needs money to spend, to sustain the economy. I believe money should be given out freely to those who work, but they must work much fewer hours, to let everyone to the table.

So the student loans will force the kid to work but there are no jobs. If he doesn't go to school, in order to avoid student loans, he or she will never get a career job.

This is not going well any more, and it's one sign of it. The massacre is another sign how things are not going well, and the Greeks are yet another sign how badly things are going.

I just hope to die of natural causes, or nearly natural causes, before WWIII breaks out. I am Jewish, and I don't take well to starvation or cold or hard work, so I don't want to go to summer death camp which my mother did (and survived).

The word trap is right, but there is one big problem with that metaphor. "Trap" means something which you can avoid, if you are clever well beyond the usual IQ of your species.

However, this school-loan thing is not a trap, because everyone is practically forced into it, there is no escaping it. You don't want to go to school? fine, young lady / young man, you will be a washroom cleaner for the next 78 years (coz they shall keep increasing retirment age). No ifs buts and ands.

A war is horrible, but it might be the only one that will help the nation to shake the depression. A lot of young men will die, but if we avoid war, a lot of young men, young women, old men and old women will die.

Eventually it's the fate of everyone, come to think of it.

-------------

Seriously speaking, I saw a DVD movie today, in which a small group of people started a society in an island and they marked the length of time of their existence there on a ceremonial pole, staring with 0001, and one could see it grow next to 0002, 0003, 0004, etc. At the sixth anniversary they were all gunned down by some farmers whose crop they were threatening to decimate.

So. The lesson is, never to start a culture or a society by predicting it to survive a thousands years. That voiced plan is the kiss of death to any new regime. Take the movie, take Hitler's Third Reich.

Then I thought: how long does a culture last? We have had the USA for two or three hundred years now, but the USA of today is not the USA of the founding fathers, or of the slave keepers, or of the industrialist/ wild westists, it is not even the USA of the two world wars, it is not at all the USA of the sixties or even the eigties.

The people are each a new generation coming from the old, true; but even if you discount immigration, the nation is completely different from itself every twenty-forty years.

So I admit that the USA is the same civilization and power as it has been for two hundred years in terms of being a political entity, but I deny that that the USA is the same civilization as it has ever been.

I also maintain that other civilizations are changing at the same rate, not just the USA. Russian went through a great many changes, China too. Smaller coutnries, too: Sierra Leone, Costa Rica, San Marino, Andorra; Bulgaria, Sclavonian People's Republic, Shamanistan, Kurgyevistan, Shovinistan.

Good thread, OP, your proposition sure got thems brain juices get pushed harder to improve the flow-through.

I have a mortgage payment myself but it is way cheaper than renting and I will be mortgage free in 4 years. I also will have my car paid off next year and own a little on my credit cards. I don't feel trapped but I do feel a bit stressed trying to pay everything off with such a low paying job. I have cut back on many things like food, clothing, entertainment, heating the house, and transportation.I don't like owing money but its a necessary evil to survive. I think where the problems start is when you don't live within your means. Me, I am the ultimate bargain hunter which includes second hand stores and Kijiji. I also am looking to start a second job or start a part time business of my own. Its a struggle as since I lost my job and took a lower paying job; I am living on $1,000,00 less a month but even with the struggle; it beats depending on anyone. I sure hope my interview goes well tomorrow as if I get this new job; all my money worries will be over. Wish me luck.

Oh yeah? Tell that to the enlisted personnel in the U.S. Armed Forces. Tell that to graduates of trade schools. Tell that to people who attended college part time while working full-time jobs.

Sometimes, the alleged "trap" is due to people thinking that they must have a Bachelor degree in order to live comfortably. Sometimes, the alleged "trap" is due to people choosing college majors that are worthless in the job market.



Oh, people with financial freedom have plenty of sympathy, but there is a difference between having sympathy and wanting to rescue people from the consequences of their own decisions. The latter is a form of enabling.

People who need people are the luckiest people in the world. Ack I channeled Barabara Striesand!

He He; you are too funny.

It also starts when you believe that happiness comes from luxurious living.

I agree. Me, I just want to be comfortable but I won't lie that if I came into a lot of money; I would enjoy a bit of luxury.

That sounds nasty. Is it contagious?

Is that Eric Idle? My childhood heros have grown old? and so have I?

Sorry you lost your job.

Proud to hear you take what you can find.

Life will only get better for you.

Thank you. I am trying to make a better life for myself. Put out about 60 resumes in the last few weeks; so hoping someone will hire me soon.

There are plenty of jobs that don't require a degree in the skilled trades, but most people don't want to do them anymore. And they pay very well. I almost became a welder myself, but that didn't work out for a number of reasons. Hopefully, the apprentice system will make a comeback someday. There would be more people doing interesting and useful jobs and fewer unemployed people with useless degrees like underwater basket weaving and so on.