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Generation DebtHow Americans are selling their souls into debt slavery at ever-younger ages, and what you need to learn about how to avoid it wherever you live on earth.by Howard Davis"I owe, I owe, so off to work I go." If you are under 35 years old in the English-speaking world, the cynical lyrics set to the Disney tune from the fairy tale Snow White are now more reality than fantasy. The majority of young adults in America, Britain, Canada and Australia have enmeshed themselves in a dependency to debt so vast their futures will likely be more defined by bondage than freedom. The story of the financial debt of Americans in general, and its young adults in particular, is so vast, it is like the beginning of the biblical epic of Israelite slaves in Egypt. And its workings are characterized by the language of the book of Revelation--a global economic bondage to a developing "Babylon the great." Let's start the story at the top of the world's economic pyramid. America's colleges and universities are considered the world's higher education gold standard, but its graduates are being reduced to serfs of debt. The process decimates the economic logic behind the "get ahead" goals of the nation's financially best and brightest youth. Between 1995 and 2005, total college student debt tripled. Two thirds of four-year college students graduate with loan debt. The Collegiate Funding Services 2004 survey of 668 recent graduates says the average college loan debt is $23,735. In addition, the typical student carries thousands in unsecured credit card debt. Nellie Mae, the U.S. government's lender for student loans, reported the results of a May 2005 survey that showed 76 percent of all undergraduate students carry credit cards, 72 percent reported using credit cards for food, 72 percent for textbooks, 68 percent for clothing and 24 percent for some tuition. Seventy-nine percent don't pay the card off each month. The typical starting salary for today's college graduate is $28,000. By comparison, when I graduated from five years of college and university at age 22 in 1972, I had $1,500 in student loan debt and a salary of $7,500. These college debtors today are the best and brightest of America's economic players in terms of earning potential. What about the non-college youth sociologists call "the forgotten majority"? According to the U.S. Department of Education, only 25 percent of American young adults become college educated, and they will make on average twice the wages (over their lifetimes) of those with only a high school diploma: $51,194 per year for college graduates, compared to $27,280 annually for high school graduates. Sixty percent of jobs in the United States require at least some college education, up from 28 percent in the 1970s. Yet since the 1970s, high school graduation has declined, so that only 67 percent even get a high school diploma. The approximately 30 percent of young Americans without even a high school education will be stuck in the bargain basement for wages, benefits and financial opportunity. But all classes are subject to the same logic of predatory lending. When shackled with debt, you limit your freedom and your future. The ancient biblical observation remains forever true: "The borrower is slave [bond servant] to the lender" (Proverbs 22:7). In America, when the "slaves" can't take any more, they go bankrupt. Tragically, college educated or not, the under-25-year-olds are a fast-growing segment in bankruptcy statistics in the United States. They have been conditioned to be the biggest debtors in history in a nation of debtors. In 1970 the average credit card holder owed $185. Now the figure is $7,500. The average American household is in debt worth 118 percent of its annual income. Generation debt In a sad tale repeated in tens of millions of young adults' lives, young men and women of the United States, Britain, Canada and Australia have unconsciously slid into a burden of debt that they are clueless about how to overcome. All English-speaking nations are in the same boat of comparable personal debt--and sinking deeper. Why? In her book Generation Debt: Why Now Is a Terrible Time to Be Young (2006), Anya Kamenetz begins the first chapter quoting a Harvard professor: "The next generation is starting their economic race 50 yards behind the starting line." This 24-year-old graduate of Yale University has already won a Pulitzer Prize in journalism, the world's finest award in her profession. She writes for New York magazine, The Washington Post and The Nation. With all this apparent success already, she started her preface to the book: "What would you do if you grew up and realized that everything America has always promised its children no longer holds true for you? " ...I was born into a broke generation. Born into a century of unimaginable prosperity, in the richest country in the world, those of us between the ages of eighteen and thirty-five have somehow been cheated out of our inheritance." How slaves feel The debt burden has all the signs of an abusive addiction. It acts like a drug pushed by powerful drug lords of debt, with the complicity of a system full of unethical players. The users are exploited by the world's richest and most powerful merchants and financiers, with their marketing machines and political enablers. You may think I use hyperbole to make the writing more interesting. Unfortunately, this is the language insightful young Americans use in describing their feelings. Carmen Wong Ulrich, another young author of another recently published book called Gener@tion Debt, has strong words for "those dastardly baby boomers and their dividend tax cuts, outsourcing drama, looming retirement, and cheating CEOs. They've stolen the country's economic spotlight for too long ...Because America, we're in trouble." "Shhhh ..." she says. "You hear that? That's the sound of millions of eighteen to thirty-four-year-olds getting sucked in, pulled down, and held under by debt." Regrettably, other young adults are not nearly as articulate or analytical. Consider a scene repeated thousands of times over. In tribute to the ultimate annual festival to debt, this sad but true tale here in Portland, Oregon, occurred a few days before Christmas 2006. A 20-something shopper handed the cashier her Visa credit card for the mound of Christmas gifts she brought to the counter of an upscale department store in the lavish Washington Square Mall. "I'm sorry, your card was declined," said the clerk. The shopper said, "Okay, here is another card." The next card was scanned. "It's declined," said the cashier. "Oh, that's so sad," said the shopper as she pulled another out of her purse. "Try this one. " "I'm so sorry, that's declined too." "Oh dear ... What can I do?" Bewildered, the young woman stared innocently at her pile of gifts and then at the clerk. The clerk smoothly broke the embarrassing moment. Like a calm rescue worker, she intoned, "Do you have a [store credit] card?" with the wonderful warmth of a smile. The shopper shook her head no. The clerk told the young woman, "I'll fix you up. Just get [our credit] card. It is so easy. It will take just a minute." Saved by this wonderfully "helpful," well-dressed saleswoman, the young shopper beamed. A few minutes later and voilà! "Saved" by debt, she is going to have to wrestle in servitude with four cards. Millions of such transactions multiply across the wealthy English-speaking world. Debt slavery is not pleasant, but it does condition the younger generation to increasing bondage. Jerrold Mundis examines the experience in his book, How to Get Out of Debt, Stay Out of Debt and Live Prosperously: "We walk a tightrope and live in apprehension of impending disaster ...This fear exerts ever more pressure on us. It begins to disrupt our lives and personal relationships. It sucks the joy and pleasure out of our days ... We come to feel defeated and hopeless. We grow depressed." Personal finance expert and former Wall Street Journal reporter Lynnette Khalfani says, "Debt is the single worst four-letter word in the English language." Debt is a profound motivator of behavior and negative emotions. Many psychologists connect the dots between increasing debt and the state of emotional instability that both leads it and feeds it. It is bondage, says Khalfani. "Debt is the longest-lasting economic curse, the most heinous financial plague, and the least recognized form of modern slavery afflicting Americans this millennium" (Zero Debt: The Ultimate Guide to Financial Freedom, 2004, introduction). In a $12 trillion-a-year U.S. economy, the largest and most dynamic in history, why do so many young people face financial ruin where they don't own their own future? How did this happen across the affluent world? Who is to blame and what do you need to do about it? The Statue of Liberty used to be a symbol of the gateway to freedom and opportunity, to a promised land where you could get a job, own a house, send your children to the best public schools on earth, spend a lifetime making more, having more, saving more. Now it is the gateway to the greatest nation of debtors in history--living temporarily on the wealth of the world, borrowed from its dependent friends and enemies. Can they escape the full effects of this bondage? Who will help them out? What will happen if the trend is not reversed? Surprisingly, the answers are spiritual, and the only way out is biblical, both for the English-speaking world as a whole and for its citizens. We show the spiritual reasons and the solutions in our publications . Learn why the English-speaking world, the most prosperous civilization in history, is headed toward bankruptcy and far worse if it doesn't reverse its debtor status. In the meantime, wherever you are, get out of debt as soon as possible, and stay out! Avoid being under its power. WNP |
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