Pushing things to the limit

Jan 19, 2008
“There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.” Ludwig Von Mises (the prince of the Austrian Economists) Seems like a quote worth pondering when Citibank writes off 18 billion and Merrill writes off another 14 billion. If you can get out of debt, do so. By the way, if the quote seems extreme, keep in mind that this week's write-offs were considered worst case scenarios by at least some economists. But it's not really an extreme statement at all. Reduce to common language and it simply says, "If you make a lot of money by borrowing a lot of money, you will eventually have to pay back what you borrowed. An individual might be able to ride it out and make and keep a fortune if he is skilled. But a society cannot. There are too many people without the experience and skills, off whom the skilled make their money. So when the society (the currency system) has to pay its bills, it will have a crisis. The sooner the better. But people who go into debt are people who are trying to avoid crises in the first place. So they'll probably push the day of reckoning off as far as they can. If they push it too far, if they are allowed to push it too far, then eventually they will lose everything, including their currency system." This is not an unusual occurance in world history. It won't be in the future either.
Andrew  Kern

Andrew Kern

Andrew Kern is the founder and president of The CiRCE Institute and the co-author of the book, Classical Education: the Movement Sweeping America

The opinions and arguments of our contributing writers do not necessarily reflect those of the Institute or its leadership.

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It seems to me that a society that refuses to deal with with their economic debt is revealing their ultimate fear. They have become a culture that refuses to deal with death. After all, this is the ultimate crisis of the human soul apart from Christ. Death is the payment due for sin ,and our culture ,in particular, is adept at hiding death from its citizens. Patients who die are hidden in hospitals and the humanity of the unborn is denied allowing them to be killed with impunity. We are a culture obsessed with using death as entertainment minimizing the magnitude of the debt owed a holy and righteous God. All debts come due, may God forgive us our debts as we forgive our debtors.

That's an interesting extension. So debt is rooted in the fear of dying? There's something to that, though the link isn't obvious to everybody.

My thought is that not paying your debts (putting them off to some nebulous future due date) is related to our fear of death.