The COLLAPSE of the American Dream! Massive Levels of Debt!

Do you agree that most people finance everything with debt?

People finance their lifestyles with maximum debt. If they get a raise at work, they buy a bigger home. If they get a year-end bonus, they buy a new car, or another liability. This applies to people at all levels. They simply do not prepare. They do not live within their means. People who earn hundreds of thousands of dollars per year are still heavily in debt. Their salary might be high but the things they own are very expensive and require a lot of money to upkeep. When a crisis hits, everyone suffers.

This happens every single cycle. People become confident, then arrogant. They take risk. It pays off. They take more risk. It pays off. So they see the pattern and continue. Until one day it doesn’t. Eventually, their arrogance becomes their downfall. Massive quantities of people during the housing crisis were burned by their failure to comply with the laws of economics. If you do not have the money, you cannot afford it.

Debt can be used to buy a home for example. Most people don’t have hundreds of thousands of dollars just sitting in a savings account. But the monthly payments are serviced with ever-increasing interest. Eventually, that will be a big mistake on their part if they took on more than they could afford.

We look at the city skyline and see countless gigantic skyscrapers, we look in our oceans and lakes and see boats and yachts, or take a drive down the street and see luxury vehicles everywhere. All of this has been financed by a fraudulent system known as debt. Almost none of it has actually been paid off. Ownership is at a minimum. If people can put 0% down on their home, they will. If it takes 8 years to pay off their car, they’ll do that. If they can’t afford an iPhone after waiting in line for 6 hours to buy it, they’ll finance it. Debt allows people to use things they couldn’t otherwise afford.

Today we see more car, bike, and electric scooter sharing services popping up everywhere. Uber and Lyft. Public transportation is often jam packed. Jobs are temporary. Home ownership is down. And so much more of this, all points to an economy at its end.

Now, there’s nothing wrong with any of this. Everyone should be in charge of their own finances and be responsible for their actions. However, those who take too much risk on the personal or corporate, or even national level, should not be bailed out by those who are risk-averse or prudent. Safety nets create a moral hazard and that causes the dislocations we have seen since the Financial Crisis.

Understand what this is. Even though it might be difficult to see. This is a mirage. Nothing more.