A depressing personal anecdote

[The Tim]

On my recent trip through SoCal to visit my wife's family we were spending some time with my 20-year-old brother in law, and the topic of debt came up. In a completely serious tone he stated matter-of-factly that "debt gives you power."

Here's what makes it even more sad. He's currently attending university to get a degree... in business. Oh yeah, and the school he's going to is in Riverside, .

I get that 20-year-old kids are naïve, but "debt gives you power"? Really? How blind can you be?

[redmondjp]

This goes along the same lines as one of my favorite 'mericanisms of late:

Debt = wealth.

Now we're finding out that maybe somebody left a slash out of that equation!

And as happened in the Great Depression I (remember, we couldn't start calling the Great War WWI until WWII happened), those NOT in debt will be soon be able to buy assets (land, houses, businesses, cars, etc) for pennies on the dollar. And what's fundamentally different this time (GDII) is the level of foreign investment that is available. There are some oil-rich middle-eastern countries that literally can't find enough places to park their cash, and we've already started selling out our public infrastructure (ports, toll roads, etc) to foreign entities and that will continue to happen.

In the global economy, we're going to re-learn the Golden Rule:

Those that control the gold (monetary system, not nec. actual gold), make the rules . . .

[Markor]

See the movie The Lookout. Great line in there: "Whoever has the money has the power".

[rose-colored-coolaid]

[Ubersalad]

Has to be an incomplete sentence.

Debt gives you power to feel trapped!

[Markor]

Debt sure gave these big banks a lot of power. It let them hold the whole world hostage until Americans borrow to pay a $700 billion+ ransom.

[perfectfire]

[rose-colored-coolaid]

[Ouch!]

[dls]

A year late or so, but I have to chime in.

I'm an engineer, and I also have an MBA (I'm still respectable because, after a short stint in corporate finance I went back to engineering and stayed [got a nice fleece vest out of it though]). When I was in biz weasel skool [late '90s-2000] using debt as a 'leverage' was all the rage. Being experienced in life [in my late '30s] and a child of Depression era parents I considered debt to be a necessary evil at best. Needless to say the good folks at biz skool thought my opinion was 'off'.

In a somewhat morbid way, the recent Wall Street bailout mess has me feeling somewhat 'vindicated'. I'm just waiting for the other shoes to fall....and looking for some good used firerams.