Nixon said, “We must protect the position of the American dollar as a pillar of monetary stability around the world.” Which later came to be seen as there were no longer limits to the amount of money that could be printed, which in turn led to America being an economy being based almost solely on ‘plastic money’ or credit and debit. The reliance on debit and credit leads to America becoming more and more in debt.
Debt quickly became a negative almost as soon as it was introduced into society. It almost isn’t solely the borrowers fault, but instead it is both the lender and the borrow who can be seen as evil. Credit in its own sense is a debt because you are borrowing money from money that you don’t actually own. Money in this sense then also becomes an evil because it is creating tension between people
David Graeber relates debt to morality. He tells us that being consumed by debt is nothing new. He calls debt simply a promise, a sense of obligation, which turns into something that can be quantified and transferred. This is how he relates it to morality, putting bonds between people that wouldn’t exist if it weren’t for the debt. It creates a moral drama, from balancing money spend in a house hold all the way to America balancing money as high up as the government.
The economy we have now is based on virtual money, which makes it a promise that we make to each other. We see that people are falling further and further into debt because of their credit. People don’t realize the amount of money they are actually spending because they are putting it on credit. Money becomes almost of no use to some people because they figure they are better off just using their credit card, turning America into an economy based more on debt instead of credit.
The “financial crisis” continues to raise questions and concerns for many. Specifically, debt is the biggest issue many Americans are facing today. David Graeber, an anthropologist explains his argument about debt in his book. He makes the argument that debt is a “moral confusion”. Many see debt, or better yet paying off debt as a value of morality.
Graeber explains that paying off your debt is a notion of morality. It is the greatest obligation one has and it would be almost unreasonable not to pay your debts. This idea of morality that is attached to debt is what Graeber argues. It like the morality of paying off your debt is the greatest value that is above anything, in that as individuals we use it justify everything. Is it correct? Should we uphold “debt” to a higher standard than any other value?
David Graeber grabs the issue of debt by its neck in exposing the simplicity behind the relationship between the creditor and debtor. He first explains a conversation he had with a woman where the center of topic regarded the IMF (International Monetary Fund) and how they push countries into debt. The young woman had trouble comprehending why countries couldn’t pay back debts they had pushed themselves into. Graeber said that the IMF convinced third world countries to take loans (during a period of go-go banking) with low interest rates. They then during the late 80s and 90s, these third world countries encountered problems paying back their debt and the IMF enforced policies regarding their domestic control over services such as food reserves and limiting public services.
Graeber continues and presents the example of his time in Madagascar and that before he lived there, there was an outbreak of malaria. The government took action and created a mosquito eradication but due to financial issue, had to cut off the program which led to 10,000 deaths. Also Graeber focused on how it is not the debtor’s fault at his/her inability to pay off the loan but rather the lender (the banks). It is because of the “risk” that banks lend out loans. Without the risk, there would be no opportunity to make gains from interest.
My take is that the value of money has been replaced by the “digital value” of money. What I mean is that it has taken on a new form, not physical but rather numerical. We’re encouraged from banks to create new credit card accounts because statistics probably show that they would profit more from individual’s debts. Some individuals do not understand the principal of needs and wants and they cannot afford what they want and take on debt for simple gratification. Very few understand the value of the dollar. So unlike David Graeber I blame the debtor or individual, however you wish to classify it. But an equal share of blame should be placed on the banks. The high risks of NINA Loans are the primary cause of the housing bubble and instigator of the ongoing global economic crisis.