October 7th, 2008
03:05 PM ET

Our romance with debt - we'll pay for it later

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2008/images/10/07/bank.crisis.jpg]Margaret Atwood
Author, The Handmaid's Tale

Unless we value fairness, reciprocity, and honest dealing, and the concept of balances - for debt and credit depend on them - and unless we are able to trust our systems, we would not be able to have debt and credit - no one would lend, because there would be no expectation of ever getting paid back.

What caused the massive financial mess we are in comes back ultimately to these concepts. The rules were too loose, fairness and honest dealing were violated, the balance was upset. We must now restore trust so people will take their pennies out of the sock under the mattress where they are now inclined to store them.

In my part of the world we have a ritual interchange that goes like this:

First person: "Lovely weather we're having."

Second person: "We'll pay for it later."

My part of the world being Canada, where there is a great deal of weather, we always do pay for it later. One person has commented, "That's not Canadian, it's just Presbyterian." Nevertheless, it's a widespread saying among us.

What this ritual interchange reveals is a larger habit of thinking about the more enjoyable things in life: They're only on loan or acquired on credit, and sooner or later the date when they must be paid for will roll around. It's pay-up time. Or payback time, supposing that you haven't paid up.

In any case, the time when whatever is on one side of the balance is weighed against whatever is on the other side - whether it's your heart, your soul or your debts - and the final reckoning is made.

The financial world has recently been shaken as a result of the collapse of a debt pyramid involving something called "subprime mortgages" - a pyramid scheme that most people don't grasp very well, but that boils down to the fact that some large financial institutions peddled mortgages to people who could not possibly pay the monthly rates and then put this snake-oil debt into cardboard boxes with impressive labels on them and sold them to institutions and hedge funds that thought they were worth something.

A friend of mine from the United States writes: "I used to have three banks and a mortgage company. Bank number one bought the other two and is now trying hard to buy the mortgage company, which is bankrupt, only it was revealed this morning that the last bank standing is also in serious trouble.


Editor's note: Canadian writer Margaret Atwood is the author of more than 35 books of poetry, fiction and nonfiction. Her novels include "The Handmaid's Tale" and "The Blind Assassin," which won the Booker Prize in 2000. Her new book, published this week by House of Anansi Press, is "Payback: Debt and the Shadow Side of Wealth." Atwood says the book "is not a practical guide about how to get out of debt. Instead it examines the underpinnings of the whole structure - why we human beings have such a thing as a debt-credit system in the first place."

Filed under: 360° Radar • Bailout Turmoil • Economy
soundoff (4 Responses)
  1. Jim

    Speak for yourself & most of America- I'm one American who has NO
    ROMANCE OR FONDNESS for debt- I Have never had nor will I have a credit card- I have one Debt to a friend which I'm working to pay off. at present Bills are paid . If I don't have money to get it I save or go without. As a result I'm not hurting like most people in this Country.

    October 7, 2008 at 4:34 pm |
  2. Gary

    The Federal Reserve loans to banks so the banks can loan to
    Corporations to ease credit these company’s have moved
    There operations over seas is this where our money is going
    And how will that help us here in the United States. No one
    Has addressed the issue of the millions of dollars going south
    How is anyone in this government helping anyone here at home?

    October 7, 2008 at 3:57 pm |
  3. Sandy, Arkansas

    Instant gratification...we are paying for it now. Individuals and the country spend, spend, and spend...money they don't have. There will always be a day of reckoning. I was always told if you can't pay cash don't buy it unless it is a house or a car (not that you have to pay cash...just have the cash). Pay the car payment and insurance payment for six months to see if you can afford it. If you can, then you will know how much money you have to live on and you will have a sizeable downpayment. When the car is paid for...keep paying that monthly payment into a savings account for your next car. Common sense approaches have got to be implemented. Most people are so far over their heads from instant gratification instead of deferred gratification that they will never get out of the quicksand of debt. Buy now pay later is a habit and we are all paying for it with the end of our economy and our country's stability as we knew it at one time. We are going to assure ourselves of having nothing if we continue to think we have to have everything...and have it now whether we can afford it or not.

    October 7, 2008 at 3:42 pm |
  4. Cindy

    We are in this mess because people are greedy and think that it is OK to live way above their means even if they can't afford it. They knew they couldn't afford these houses yet got them anyway.

    Then the banks are greedy because they were getting big money and thought oh well if they can't afford the houses we can resale them and still have the money they already paid us. Yet they never thought ahead that many, many people would not be able to pay so when this happened the banks were way in over their heads with these mortgages and houses that were now no where near worth what they have in them.

    And who passed the bill allowing banks to give loans to low income families that couldn't afford them....Jimmy Carter...a dem!

    Now we all have to bail them out in order to keep our economy afloat. They all should be prosecuted in my opinion!


    October 7, 2008 at 3:37 pm |