Sunday , 23 October 2016

The American Way: Living “The” Lie

Our country has gone mad over the last few decades. We had a chance tolies-about-gold come to our senses in 2008, wipe away the debt, liquidate the criminal Wall Street banks, prosecute the perpetrators, and reorient our economy and society back to one built upon savings and investment, rather than borrowing and consumption but it was not to be…The coming collapse hopefully will force Americans to come to their senses one by one. [Let me explain.]

We’ve lost respect for ourselves and others, transforming from citizens with obligations to consumers with desires. The love of mammon has left our country a hollowed out, debt ridden shell of what it once was.  When I see the data from surveys about the amount of debt being carried by people in this country and match it up with the totals reported by the Federal Reserve, I’m honestly flabbergasted that so many people choose to live a lie. By falling for the false materialistic narrative of having it all today, millions of Americans have enslaved themselves in trillions of debt. The totals are breathtaking to behold:

  • Total mortgage debt – $13.6 trillion ($9.9 trillion residential)
  • Total credit card debt – $924 billion
  • Total auto loan debt – $1.0 trillion
  • Total student loan debt – $1.3 trillion
  • Other consumer debt – $300 billion

With 118 million occupied households in the U.S., that comes to $145,000 per household. When you consider that only 74 million of the households are owner occupied and approximately 26 million of those are free and clear of mortgage debt, that leaves millions of people with in excess of $200,000 in mortgage debt.

Keeping up with the Joneses has taken on a new meaning as buying a 6,000 sq ft McMansion with 3% down became the standard operating procedure for a vast swath of image conscious Americans. When you are up to your eyeballs in debt, you don’t own anything. You are living a lie.

…Living a lie will result in more pain and suffering for those who didn’t learn the lesson last time which saw a housing bubble burst and national home prices plummet by 30%.

  • At least…[a home] is an asset capable of appreciation backed by the mortgage debt.
  • but auto loans are backed by a rapidly depreciating asset,
  • while credit card debt allows Americans to live above their means while living their lie,
  • and student loans  are the new subprime debt which will never get repaid.

The country has been living a Big Lie since the day Nixon closed the gold window in 1971, eliminating any vestiges of constraint upon central bankers and politicians.

The Fed has continuously debased the currency and politicians have promised voters freebies while waging never ending wars of choice, creating a warfare/welfare empire of debt totaling $18.7 trillion with unfunded promises of $200 trillion.

The masses have been lied to by bankers and their mass media mouthpieces, while willfully buying into the lie of living for today and funding it with debt. An entire society bought into the fallacy that a country could transition from savings and investment to borrowing and consuming, with no adverse consequences. The mass delusion is clearly evident in the comparative consumer debt data from 1971:

US population in 1971 – 208 million
Total credit card debt 1971 – $8.5 billion ($41 per capita)
Total auto loan debt 1971 – $40.5 billion ($195 per capita)

U.S. population in 2015 – 320 million
Total credit card debt 2015 – $890 billion ($2,781 per capita)
Total auto loan debt 2015 – $1.03 trillion ($3,219 per capita)

The population of the U.S. has grown by 54% since 1971,

  • but the amount of credit card debt per person has grown by 6,782%,
  • and the amount of auto loan debt has grown by 1,650%.
  • Meanwhile, real median household income has grown by 8% since 1971.

Replacing income with debt in order to give the appearance of wealth is nothing but a lie. It requires an ever larger amount of debt to generate an additional dollar of GDP. The exponential increase in debt became unsustainable and the Wall Street lies resulted in a global conflagration in 2008. The desperate effort by the Fed to re-inflate the debt bubble through ZIRP and QE has resulted in pathetic economic growth, while leaving willfully ignorant consumers with a record level of debt.

A recent report by Nerdwallet revealed the outrageous amount of consumer debt millions of Americans have chosen to take on in order to live the lives they feel they deserve – and Wall Street is only too willing to oblige them with credit, as they reap riches from the billions of interest paid each year by the debt slaves living on the plantation we call America.

In addition to charging away their lives, Americans lie to themselves about how much debt they really have. It’s too painful to deal with reality, so they ignore it. The data in the report is frightening:

  • The amount of credit card debt carried by the average household carrying this type of debt is $15,355.
  • The amount of auto loan debt carried by the average household carrying this type of debt is $26,530.
  • The amount of student loan debt carried by the average household carrying this type of debt is $47,712.

The average household is paying more than $6,600 in interest per year, which means that roughly 9% of the average household’s income is being spent on interest alone.

Credit card debt — one of the most expensive types of debt — costs consumers an average of $2,630 per year in interest, assuming an average APR of 18%. If you have the average amount of credit card debt ($15,355) and a 15% interest rate and only pay the minimum on that debt each month, it will take you more than 31 years to repay your debt and will cost you more than $18,600 in interest payments alone.

The average amount of credit card debt peaked at $16,912 in 2008, fell by 14% to $14,539 by 2012 as Wall Street banks wrote off billions in bad debt, and has since risen by 6% as consumers have been lured back by the Wall Street propaganda machine.

Consumers vastly underestimate or under-report how much debt they have. In fact, as of 2013, actual lender-reported credit card debt was 155% greater than borrower-reported balances.

Americans are embarrassed and ashamed by their levels of consumer debt, but they can’t stop. A record number of new cars will be “sold” this year with:

  • the highest level of auto loan debt in history,
  • the longest loan length in history,
  • rising percentage of subprime auto loans,
  • and an all-time high in percentage of leases.

These people are underwater on their auto loan/lease the second they drive off the lot but at least their neighbors and co-workers think their successful.

Appearances are all that seem to matter in our society today. Dying in debt will be common place in the coming years. Fully 21% of Americans say they don’t think they will be able to pay off their debts — including their car, credit cards, student loans and mortgages — in their lifetime, according to a survey of more than 1,000 adults by Our debt addict society is dying of an overdose…

Want more such articles? Just “follow the munKNEE” on Twitter; visit our Facebook page and “like” an article; or subscribe to our free newsletter – see sample here.

The original article was written by James Quinn (the and is presented here by the editorial team of (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample here) in a slightly edited ([ ]) and abridged (…) format to provide a fast and easy read.]

Related Articles from the munKNEE Vault:

1. Majority of Americans Are Willfully Ignorant Delusional Consumers – Here’s Why

A lack of discipline, inability to delay gratification, failure to understand basic mathematical concepts, materialistic envy, absence of critical thinking skills, and a delusionary view of the world have left the majority of Americans broke and in debt. Let me explain further.

2. Don’t Obsess About “Keeping Up With the Joneses” – Outsmart Them Instead! Here’s How!

If you are hoping to live a happier, fulfilled life without money stress, you may not want to obsess with the Joneses. You can outsmart them by making better choices. HERE are several ways you can likely beat the Joneses and improve your financial health.

3. A Comparison Of Household Spending – By Country – For Different Expenses

The Economist infographic below shows how much people in households around the world allocate to different expenses such as food, housing, recreation, transportation, and education.

4. Credit Card Debt Binge Making Americans Debt Slaves Again

The final effort in the debt-fueled “recovery” of the U.S. economy from the Great Recession – the increase in consumer credit card debt – is seen by Equifax as that of “American consumers…getting on with their lives.” Yes, indeed, their lives as debt slaves!

5. 8 Signs You’re Flirting With Financial Ruin

Are you heading for a financial fall? The line between a future of financial solvency and one of distress is thinner than you might think. Bankrate offers eight signs you’re flirting with financial ruin. If four or more of these signs sound familiar, it’s time to seek help. [Take a look.] Words: 1697

6. 10 Money Ideas That WILL Change Your Life

Personal finance isn’t nuclear physics – just spend less than you earn, save and invest the rest – but knowing what should be done and actually doing it, however, are two different things. Here are 10 money lessons I wish I had known when I was 20 which have the power to change your life if you are willing to embrace them. Words: 1340

7. U.S.A.: United States of Addiction – Our Insatiable Appetite for Debt

16 point 7 trillion dollars.  That is our current national debt.  12 point 8 trillion dollars.  That is the amount households carry in mortgage and consumer debt.  We are now addicted to debt to lubricate the wheels of our financial system.  There is nothing wrong with debt per se, but it is safe to say that too much debt relative to how much revenue is being produced is a sign of economic problems.  At the core of our current financial mess is how we use debt as a parachute for any problem. [Unfortunately,] addictions are never easily cured and we have yet to come to terms with our insatiable appetite for debt.  Words: 850

8. 75% of Americans are in Deep —t!

Rising education and medical costs, on-going credit card interest payments, well used personal lines of credit and large mortgage debt and home equity loans – most a penchant for living beyond their means – is keeping 75% of American households in some degree of debt. Take a look and then pass it on to your friends, neighbors and co-workers.

9. Financially Most Americans Are Totally Unprepared – What About You?

It’s up to the concerned and critical-thinking among us to look at the math, the hard data underlying the headlines, and construct what we can best calculate to be true about our current personal financial level of (un)readiness for the future and the truth is that there are 3 adult generations in the U.S. are experiencing a squeeze that is making it harder to create value, save capital, and pursue happiness than at any point since WWII. Let’s walk through the numbers.

10. Piling On Debt Has Destroyed the “American Dream” – Here’s Why

The American Dream–characterized by plentiful jobs offering living wages, security and opportunities to get ahead–is over….Piling on debt is not a solution; it’s simply a politically expedient method to forestall the crisis, while guaranteeing the eventual repricing will be even more severe because the debt load is then so much larger. If you think otherwise, I strongly recommend that you reduce your dosage of Delusionol.




  1. I absolutely love your blog and find nearly all of your post’s
    to be exactly what I’m looking for.
    Would you offer guest writers to write content available for you? I wouldn’t mind composing a post or elaborating on a number of the subjects you write with regards to here.
    Again, awesome web site!