Thursday 20th December

Years ago I had a fairly Aristocratic boss, who came from old money and had traditional values about it.  He insisted you should never spend Capital, but should try to add to it from your Income; Debt he abhorred.  Of course he probably had enough Capital to never need to incur Debt.  My father hated any form of ‘Hire Purchase’ as it used to be known and my parents would assiduously save up for everything.  I inherited this habit, but did on occasion take out small bank loans and always repaid them on time out of Income.  Then along came the seventies housing boom, and the feeling that if you didn’t buy a house you would be left behind.  And Mortgages were the only way to buy such an expensive item, so Debt became not only acceptable but a necessary evil, and considering the inflation of the seventies and eighties the only sensible thing to do with your money.  As your wages went up, your mortgage as a proportion diminished.

Then along came credit cards and some like me use them and pay off the Debt every month, but many juggle cards and rates and minimum repayments to almost increase their Income, even if at the same time they are increasing their Debt.  As long as someone keeps raising their limit they carry on.

And so Debt has become, not only acceptable but almost ‘de rigeur’; the only way most people buy a car is with Finance, in fact almost renting a car that will never actually be yours as you will trade it in before long and buy a newer model.  Our whole society is geared towards Debt, and now as Income in real terms is falling and most Capital is locked up in falling-in-value houses Debt is the only way out of the hole which Debt created.  And ‘Hello’ here on the scene – the latest manifestation of Debt – Payday Loans, where even your wages will be ‘mortgaged’ and soon too I expect will be three month and six-month secured loans, where a proportion of your wages automatically disappears even before your student loan, mortgage and car-loan are whisked away too, and guess what – you will never ever pay it off, it will keep growing like topsy until they own your car and your house and then you.  Welcome to the new world of Superdebt.