Debt-Serfdom Is Now The New American Norm

By | July 5, 2021
Debt-Serfdom Is Now The New American Norm

The typical American household is insolvent: its debts exceed its assets.
There is nothing fancy about calculating insolvency: if debts exceed
assets, the enterprise is insolvent. By this measure, most American
households are insolvent, if their real assets are marked to actual
market. The typical American household is thus in service to its debt,
not to its assets, and to the holders of that debt. This is debt-serfdom: serfdom in service to the owners of debt, debt that may well always exceed the value of the household’s assets. This is debt-serfdom for life. If we look at the American household as an enterprise, then we have to differentiate between unproductive, trapped capital, assets held in a house or retirement account, and productive, free capital which
can be moved in and out of productive assets to earn a return which
increases free cashflow income in the present….Wealth and income do
not flow from servicing debt incurred by trapped assets, it flows from
productive free capital. Thus the typical household toils not
to increase productive capital that can be deployed to increase
household income but to service their crushing debts
. How else can we describe this situation other than debt-serfdom?