Six Thousand To One

The NBC evening news last night reported that the "typical American carries ~$16,000 in non-mortgage debt...a record amount."

Although I don't doubt that we're mortgaged up to our eyeballs, this figure is suspicious because they've earlier reported household debt levels. This might be a household number instead...but either way...it's a big number.

It was also reported that the average household carries $8,800 in credit card debt. So non-credit card debt is the difference, or $7,200.

Nonetheless, the critical point I want to make is this: that $7,200 figure represents permanent, systemic debt -- debt that can never and will never be paid down. If everyone everywhere paid off every dime of credit card debt the debt floor would remain at $7,200.

Why?

Because each American requires motorized perpetual transport, required because our suburban living arrangements force private individual automobiling, and everyone only puts the minimum down and finances the rest. I'll bet 99% of that $7,200 is wrapped up in motor vehicle loans...cars, SUVs, fishing boats, ATVs, dirt bikes, trucks, scooters, motorcycles, airboats, private jets, helicopters, ultralights and mopeds.

A lady in Pennsylvania was interviewed in the news segment and said that to pay off their debt, their family will have to go without "eating out, fancy coffees, books from the bookstores, and toys for the kids." And the obvious glaring omission from her list? Their fucking cars! and all the 'required' shit that goes with them -- Tom Tom Go in-car navigation systems, Lowjack, car alarms, smog fees, car stereos, tire shine, rear window tinting, maintenance bills, oil filters, seat covers, wiper blades, trailer hitches, accident deductibles, carpeted dashboards, bedliners, air fresheners, spare lamp bulbs, Blueteeth, insurance payments and registration fees.

The news segment panned across her beautiful new vinyl-clad, poorly-proportioned, two-story, raised-ranch shitbox, and sitting in the driveway is what looked to be about a $24,000 minivan. Odds on this being the only vehicle in the family? 6,000:1.

Americans can never dig themselves out of this systemic automotive debt. If they happen to pay their auto loans off, they'll be forced into another set of loans a few years later. This is the equivalent of paying interest only on a $7,200 loan forever...just another sunk cost to maintain our auto-centric lifestyles.