Debt Makes Losers of Us All — Here’s How to Challenge the System

January 23rd, 2018

By Carolanne Wright

Contributing writer for Wake Up World

“With the nation’s household debt burden at $11.85 trillion, even the most modest challenges to its legitimacy have revolutionary implications.” ~ from the article, “Don’t Owe. Won’t Pay. Everything You’ve Been Told About Debt Is Wrong.”

After twenty years, I’ve finally paid-off my student loans. The original debt back in 1997 was a cool $22K. By the time I was able to get that particular debt-monkey off my back, the student loan tab was an astonishing $65K — almost triple the original loan. I try not to brood much about about the scam behind this form of lending, such as how you are unable to shop around for a better interest rate (once the loans are consolidated) or that you have zero consumer protection if you find yourself in dire financial straits. The compounded interest alone is enough to keep one awake at night.

Unfortunately, I — like many others — have fallen prey to predatory student loan practices at an age when we are completely unaware of the real consequences of this “contract with the devil.” As I’ve grown older, I have (painfully) learned the truth about debt. It’s why I haven’t used a credit card in over thirteen years and refuse to go into debt for any reason moving forward.

I’m lucky as I’ve been able to manage. However, many are not. With the stalling of wage increases, paired with the sky-rocketing cost of living, it’s becoming progressively difficult to simply subsist without having some sort of debt. But when we factor in staggering income inequality that continues to grow, along with shady bank practices, many are questioning the financial system overall and creating new ways to avoid becoming entrapped by it.

A Modern Slavery

“Is debt legitimate when it is systemically foisted on the vast majority of people and nations? If it isn’t, then resistance to illegitimate debt has profound political consequences,” asks Charles Eisenstein, author of Sacred Economics and The More Beautiful World Our Hearts Know is Possible.

Eisenstein highlights the idea of “odious debt” — a legal principle for challenging a national debt which hasn’t benefited the country. An obvious example are the loans to build the Bataan Nuclear Power Plant. The cronies involved with the deal profited outrageously, but the project never produced a single watt of energy.

A majority of these types of debt open up developing nations to the exploitation of their natural resources when they are unable to repay the loan entirely, which it turn triggers a liquidation of national assets. What’s more, because they’re interest bearing, a country can pay off the original loans many times over, but still be in debt. It’s a modern form of colonialism — and economic slavery.

“The same might be said for municipal, household, and personal debt,” says Eisenstein. “Tax laws, financial deregulation, and economic globalization have siphoned money into the hands of corporations and the very rich, forcing everyone else to borrow in order to meet basic needs.”

“He adds, “Municipalities and regional governments now must borrow to provide the services that tax revenues once funded before industry fled to the places of least regulation and lowest wages in the global “race to the bottom”. Students now must borrow to attend universities that were once heavily subsidized by government.”

While the average family is forced into debt just to cover basic living expenses, income inequality continues to grow at a staggering pace. This isn’t an issue of laziness or irresponsibility, it’s about the ethical implications of such a system and if it’s truly legitimate.

“Corruption, greed and economic inequality have reached a peak tipping point. Due to the consolidation of wealth, the majority of the population cannot generate enough income to keep up with the cost of living. In the present economy, under current government policy, 70% of the population is now sentenced to an impoverished existence,” writes David DeGraw in his book, The Economics of Revolution.

De Graw believes that it’s impossible under the current system for 70% of working-age people to earn enough to cover basic necessities without some form of debt — which will be impossible to pay back “because there are not enough jobs that generate the necessary income to keep up with the cost of living.” This infographic really drives the point home.

When you compare the predicament of the average worker to the top 1%, it’s enough to get anyone’s blood boiling.

“… the top 1% has a mind-blowing $32.6 trillion.

“To begin to comprehend wealth of this magnitude, one trillion is equal to 1000 billion. $32.6 trillion written out is $32,600,000,000,000.00.

“Having that much wealth consolidated within a mere 1% of the population, while a record number of people toil in poverty and debt, is a crime against humanity. For example, it would only cost 0.5% of the 1%’s wealth to eliminate poverty nationwide. Also consider that at least 40% of the 1%’s accounted for wealth is sitting idle. That’s an astonishing $13 trillion in wealth hoarded away, unused.” [source]

This doesn’t even take into account the trillions of dollars of offshore wealth.

It’s no wonder debt resistance movements are on the rise, both at community and national levels. Citizen debt audits are happening around Europe, where activists examine the financial books of cities to discover if any of the debt was acquired through “fraudulent, unjust, or illegal means.” If so, they actively pursue renegotiation or contest the debt. Others are challenging unbalanced financial structures with “complementary currencies, time banks, direct-to-consumer farm cooperatives, legal aid cooperatives, gift economy networks, tool libraries, medical cooperatives, child care cooperatives, and other forms of economic cooperation,” says Eisenstein.

We can also look to changing the way in which money is created. Two possibilities are positive money and negative interest currency.

Eisenstein explains that positive money is “money created directly without debt by the government, which can be given directly to debtors for debt repayment or used to purchase debts from creditors and then cancel them” — while negative interest currency “entails a liquidity fee on bank reserves, essentially taxing wealth at its source. It enables zero-interest lending, reduces wealth concentration, and allows a financial system to function in the absence of growth.”

Lastly, we can cultivate community-based finance or quietly undermine our current financial system by supporting cooperative home buyer programs that allow for members to own homes in just four years — with zero debt.

Sacred Economics with Charles Eisenstein — A Short Film

Article sources:

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About the author:

Carolanne Wright

I’m Carolanne — a writer, chef, traveler and enthusiastic advocate for sustainability, organics and joyful living. It’s good to have you here. If you would like to learn more, connect with me at or visit

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