Margaret Atwood: Is Debt Necessary?

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Starting a discussion with the assumption that debt is evil is flat-out wrong. Debt is a useful tool when it is used properly to speed up purchases that will help us make money now, whether we buy training or income-producing assets.
The problem is the "buy now, pay later" culture. Interest is the price we pay for the convenience of buying now. People stopped thinking about that price and blindly chose to live with a credit card balance as a part of their life. Car dealers know this and get people to focus on the monthly payment, regardless how long these payments last.
In short, people have trained themselves to mortgage their future for current gratification. This has nothing to do with thrills. We have forgotten the idea of delayed gratification because current reward is more certain and satisfying than future punishment. Ask any criminal.

JimmyDaGeek of MD 2:33PM October 25, 2008

Looking through history, I think debt has been around since day one -- but our generation has turned it up a million notches.
I understand her confusion as a kid over the money she "earned" in her savings account -- I grew up around working-class people who earned their money by producings tangible items (farmers=food; carpenters=buildings; mill workers=steel).
To this day it seems bizarre to me to "make money" in stocks, because there is nothing produced. I still, in the back of my mind, believe the only real way to earn money is to have something tangible to show for it, like real estate.

Single mom of CO 10:47AM October 24, 2008

For those who are interested, Margaret Atwood wrote an op-ed in the New York Times today on the meaning of debt- to read it, copy this url into your browser:
http://tinyurl.com/5ddkec

Kimberly Palmer of 12:36PM October 22, 2008

This is also a topic that has facinated me. I work in finance and accounting, and typically need to review loan documents. The aspect of Islam that governs interest and lending is referred to as Murabaha. I don't claim to know alot about it, but have been reading some Murabaha loan agreements lately from a large Dubai private equity group. These things are definitely interesting, as they structure the loan in a way that there is no direct interest payment, but a number of fees that allow the transfer of funds back to the lender. The structure here is effectively the same as including an implied interest rate, but is never discussed as such. To my mind, this is similar to the tooth fairy example, where it is not counted as interest only because people say that it isn't interest.
Anybody with a better understanding of Islamic lending have a take on this?

Stuart of AR 10:55AM October 22, 2008

U.S. taxpayers and their children, their children's children and so on have been placed in debt by the spending by the Bush administration with the complicity of the congress.
Saddam Hussein's reign ended 5 years ago, yet the spending and bloodshed goes on and on as the reasons change from time to time as the last reason is proven false.
And then there's Afganistan/slash/Pakistan.
Is debt necessary? It's inevitable.

HillbillyBill of TN 4:23PM October 21, 2008

That's a great point, and this book made me wonder about that, too. Atwood delves into how Christianity thinks of debt (and how it is associated with sin), but, unless I missed it, she didn't get into the Islamic faith and prohibitions of interest there.
Perhaps a Muslim reader could enlighten us on this point and explain how the prohibition on interest works in real life? Is it more of a help or hindrance?

Kimberly Palmer of 1:36PM October 21, 2008