The Amazing Power of Debt

The Amazing Power of Debt - picture of couple stressed about bills

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If you could name one force that rules the world, what would it be? Would it be politicians and governments? Are the people they govern really the ones in control? Maybe it is the group with the biggest guns that calls the shots? Although a case could be made for the extraordinary power of any of these groups, the one thing that really rules the world is debt.


The Destructive Force of Debt

The power of debt is unlike almost any other power ever invented by man. Those that owe money become the slaves. Those who are able to lend money are the masters. While it may be the case that the debtors are not directly working for their debt masters, make no doubt about it, they are working for their debt.

The power of debt lies in its ability to frighten people, and it does a great job of it. While our desire to have more than our neighbor is what drives us toward debt, the debt itself is something that may permanently bind someone to their job. It scares them into not taking any risks and walking the straight and narrow path. Those trapped by the chains of debt must do what they’re told for fear of losing their income – which in turn means not paying their lender, and losing their stuff. What kind of life have we chosen when we choose to pay for things by taking out debt?


The Addiction of Debt

The lenders are all too happy to perpetuate our addiction to consumerism, which feeds our addiction to debt. You see, the debt profiteers never want you to work your way out of debt. They want the cycle to continue. The more that you owe them, the more obedient you have to become. Why? Because if you don’t, they will simply take it all away from you. Is that freedom? Is that the American dream? I think not.

So why do we do this to ourselves? Why are we allowing ourselves to fight a constant battle to keep our heads above water? We do it because we want too much. We overconsume in almost every way. We do it in our personal lives. We do it in our business lives. Is it any wonder that our public officials are all too eager to incur debt on behalf of us in the public sphere?


Will History Repeat Itself?

The financial crisis of 2008-09 should have shown us what happens when we build castles of wealth on the sands of debt. Sooner or later, our financial foundation will be washed away. The Great Recession should have been a warning to us all, both in the private and public sectors. Unfortunately, it seems like we have learned very little from that near disaster. If we continue to live in debt and borrow money the way that we do now, we are going to see the ruin of both our personal finances and the public sector.


Debt as a Means of Control

You see, going into debt means handing over control of your finances – and really your life – to somebody who is all too eager to have that power. Whether that is a friend, a bank, or a foreign country, the relationship changes when you owe something to somebody else. It is no longer a relationship of equals. One now has power over the other. Whether or not they choose to exercise that power is up to them. At that point, you have already ceded control over your situation to your lender.


In the end, going into debt really amounts to voluntarily giving up some of your freedom. To combat this, always pay for things as you go. Use cash. Buy less. Until we learn this lesson, both in our personal lives and as a nation, we risk losing everything that we have. That is a risk that I am no longer willing to take.

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  1. Your last point about losing control is what I hate most about being in debt. They don’t call it being a wage slave for no reason…

    I also honestly believe that the debt has gone too far and at least a partial collapse of the public sector is close to unavoidable.

    I hope I am wrong…

    1. I wish you were wrong too. Unfortunately, the shit will eventually hit the fan!

  2. I could not agree more! That is what killed me when I was in debt was the fact that I was allowing someone else to control my finances and being a slave to them really.

    That point of being a slave and losing control is a great point. On the news last night they were talking about how China is in the midst of picking their new leader. They said a key thing being looked at by the Chineses, who is the largest holder of US debt, was how that man would deal with Washington and the debt of ours they have. Very eye opening for those who might not follow something like that.

    1. That whole situation is absolutely frightening. Where is our huge debt leading us?

  3. You make a great point that debt can really make you a “slave” of sorts as you are required to hold up your end of the bargain and give all the money back…and then some. It’s similar to living paycheck-to-paycheck in that you essentially become a slave to your work and you HAVE to go to work even if you absolutely hate your job, because otherwise the bills don’t get paid and you lose everything you have.

    1. That is why we work so hard to pay off our house and become financially independent as soon as possible. There will come a day when I can do whatever I want and have to answer to no one! Muaahahhahhh!

  4. Great article. It really is a matter of slaves and masters. Debt is addictive too… a lot of people get into debt, realise they might just want to stay there because that’s what everyone else is doing. We are at breaking point

    1. I agree. But I don’t like being a slave and refuse to follow the status quo.

  5. I HATE all these feelings you listed. They BLOW. I think you should add though that once you actually take control of your finances and manage an attack plan for your debt you regain some of that control.

    1. I totally agree. I see things totally differently now that we are debt free. I can see the light at the end of the tunnel now!

  6. I wish debt education was a part of bringing up children. They certainly see the stress of parents struggling with debt. Why can’t parents talk to children about good and bad debt decisions? I guess we want to be heros.

  7. I hate that feeling too, good or bad debt, that I owe something to someone. I went to a shop yesterday who offered “easy payments” and for 21 payments, you had to repay twice the price of the item! People are poor here and can’t afford to pay cash, so at those rates there is no way they’ll ever get ahead.

    1. That’s so sad. It seems like the people who are least equipped to deal with making payments like that are the exact people that get advertised to the most.

  8. What a great time for this story, Greg. There isn’t any other time when the big retail machine is in motion more than the next few weeks. It’s gotta be the most dangerous time for consumers.

    1. If I see another black friday ad today I’m going to slap someone in the face. I know just what you mean!

  9. Great post. I need to stop adding debt and stop looking for new houses as well. Why add more debt?!

    1. Can you please help me from looking at new houses too? Maybe I just need to block real estate sites on my computer.

      1. I can get you both from looking at new houses. We had a great little house that we loved – bought it low, sold it high – back in the day. Built our dream house – still paying it off. Approaching retirement and are in no position to fund our son’s law school. UGH!!! Think LONG term. Wish someone had told me that years ago.

        1. Thank you, Jim. That is exactly what I need to remember. We are only 35 months away from mortgage payoff. Now is not the time to upgrade!!!

          1. Good for you, darling. 3 years and your mortgage is paid off! Nice! Don’t you dare even think about buying a different house. That 3 years will go by faster than you know. Best of luck! And I’m telling you from experience, your kids will never know the difference – untill they need $ for college and then they are REALLY going to appreciate your not getting a new house.

  10. As the bible says, “The rich rule over the poor and the borrower is slave to the lender” – Proverbs 22:7.

    I would also agree that people learned very little from the recession. It has brought about some frugality and the DIY craze, but people still aren’t saving for retirement. It’s a matter of time before we have a great debacle and one that will likely have a lasting impact and change.

    1. I don’t think people have learned anything either. Same shit, different day. People are still making the same idiotic decisions they were years ago…except now the stakes have risen.

    2. Hey, I was going to post that verse! Anyways, totally agree here. Heck, God was all up on this wisdom over 2,000 years ago, and we still haven’t learned a thing. We’re just more “sophisticated” with our debt than they were, I guess, but we still are borrowing like crazy people.

      Thanks for writing this, it needs to be said over and over 🙂

  11. I agree and it’s only getting worse. You see car lenders offering terms of 72 months and some offer 84 months to purchase a car. This only encourages people to take on more as long as their payment is low. Like your post discusses, people then become more enslaved to debt.

    1. I agree! And the people who take 84 months to pay off a car will probably trade it in 5 minutes after its paid off.

  12. One of the hardest things I’ve had to get over is the need for instant gratification, and the plastic card is your frenemy. It wants to feed your need, and at the same time it will treat you like crap after you have used it. Owing sucks. I do everything in my power now to fight that urge. It’s a million times better, but I still admit to the “feeling” of really wanting something right. now.

    1. I think that it is only natural to feel that way sometimes. I still want “stuff” every once in a while too!

  13. Debt is awful, so awful. I cannot wait for the day when my consumer debt is finally gone!

    And I agree that I don’t think people have learned enough about the recession and what habits got people into the situation they’re in. Recessions happen and they will happen again in our lifetime.

    1. I agree with you! The same things will happen over again to some people, but we don’t have to participate!

  14. This post puts debt in it’s proper place – something to be avoided. I completely agree with being a slave to your job because of debt – that’s something that I can’t wait to eliminate. I’m sure I’ll keep my current job, but it’ll be nice to keep it because I want to, not because I have to.

    1. That is exactly how I feel. Even now, if one of us lost our job we would be okay because of the good choices we have made. It’s nice to not have to worry about scrambling to find another job really quick. I like that freedom.

  15. Awesome post. Debt is so destructive, yet most of us are more than happy to get in it. There are only a few of us that work hard to get back out of it. The controlling aspects of being in debt is what pushed me harder to get out.

    1. Thankfully, some of us are smart enough to not get into debt in the first place OR to get out of debt as quick as possible!!!!!

  16. Good topic given my topic about borrowing via P2P lending today. There is definitely more reasonable reasons to borrow, than not.

    Got to be patient and accumulate capital first!


  17. I also equate debt with a lack of freedom. To enjoy and experience freedom, there is really no way around not having debt (or having abundant resources). Removing debt should be a goal of everyone. Solomon knew what he was talking about in Proverbs when he said “the borrow is slave to the lender”.

    1. I agree that it is a lack of freedom. People who are in debt have to plan their lives around it in order to keep making the payments. People who are not in debt can be flexible in the way that they live their lives.

  18. justin@thefrugalpath says:

    I completely agree with the analogy that if you owe money, you are a slave to the lender. Many have dreams of wealth, however to achieve something you should copy what others do. Rich people, not just who pretend to be by buying stuff, don’t do debt. How much personal debt do Buffet or Gates have compared to their wealth?

    1. Debt just sucks in general. I’ve been there. It’s not worth it.

  19. *Forged in the fires of Mordor, a force so powerful, so evil… one force to RULE THEM ALL!* woops, we’re not talking about LOTR ? Yikes that was awkward. I believe the people behind credit are the rich and powerful who have enabled what we fail to acknowledge today – modern SLAVERY. Debt slavery that is. Call me paranoid but I always look on the dark side first.

    1. I was raised in a religion that preached debt was slavery. Even though I no longer identify with many of the religions tenants, that one has stuck. So I’m with you all on this one!

      Unfortunately there are still other forms of slavery in our modern world. Even in our own country. The biggest one I’m aware of are sex salves, and those are usually kids, sadly enough.

    2. Fuck yes!

      My suggestion to anyone considering taking on a bunch of debt is “Fly, you fools!”

      Don’t worry, Veronica. Greg and I have full conversations with each other in Lord of the Rings and Game of Thrones quotes. You’re in good company.

  20. Mandy @MoneyMasterMom says:

    Great Post Greg, the economy is still sitting on sands of debt. It’s scary what might happen when the next s%$t storm hits. Makes me want to buy a hit in rural Botswana and enjoy my life there away from the news, or impending disaster.
    On a side note, I wonder what financial reporters would be talking about if not the fiscal cliff….

  21. Mandy @MoneyMasterMom says:

    haha yeah that would be a hut in Botswana, not a hit….. not sure of the local drug scene there, but I’m not interested haha

  22. Epic post. When the very foundation of a financial system and economy is built on debt, consumerism and infinite growth (none of which are sustainable), something inevitably has got to give…yikes. Won’t be pretty.

    1. Yes, and what is the best position to be in when shit hits the fan? Is it out of debt? I would like to think so…but who knows. If the entire economy falls apart as some people predict then nothing may matter anyways.

      But I am working on getting out of debt because I think that is my best bet of surviving any financial catastrophe. Hopefully it will be the right thing!

  23. Brian Porter says:

    Consumerism and going into debt is just an attempt to try to fill holes in our life left by death, broken relationships, lack of a relationship with a higher being, etc. Do you rule your stuff or does your stuff rule you?

  24. I totally agree that debt is very addictive, especially when policy makers make borrowing so cheap by keeping interest rates at pretty much record lows. It’s unfortunate that society has a short term memory when it comes to the consequences of too much debt and leverage. Despite people losing their jobs and home in the last recession, I’ve seen surveys now that indicate people this year will spend more on holiday shopping than last year. It’s not a problem if we were all responsible and paid as we go like you said, but I expect lots of people will be ringing up those credit cards. I can only hope their new year’s resolutions will be to pay it off :0)

  25. Not only is debt a major profitable industry for debtors, but also for people who teach others to stay away from it. Dave Ramsey makes millions by teaching this simple concept and little bloggers like us can even earn some small potatoes by doing the same on a smaller scale.

  26. Sudip Adhikari says:

    The problem is that debt does not really have much influence on our social life. The reason is that we keep the story to ourselves only.
    Yes, I agree this could be very damaging to a person, but not to the society as a whole.

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