Americans and Debt – An Avoidable Crisis

by Eddy Sumar 10/25/19

“The rich one rules the poor,
And the borrower is a slave to the lender.” – King Solomon

The mounting student loan and credit card debt, an alarming rise in the number of auto loans that are late or defaulting, along with a host of other global factors are some of the alarm bells that keep sounding and flashing on our financial dash boards. They call us to action, to wake-up, rise-up, become financially disciplined and march towards financial freedom.

This march towards financial freedom should have started decades ago. It is sad to recount that families and schools are not teaching how to become financially free. Banks and financial institutions are the proverbial fox in the hen house. They continue to pursue greedy endeavors, not the financial welfare and freedom of the nation.

Notwithstanding some good elements, banks and bankers, financiers and financial institutions have been claiming for years that they want the nation to be financially savvy yet belie their claims in the quest for their own aggrandizement. They do not care about the common person; they care about their own salaries and bonuses, boats and yachts, automobiles and luxuries.

Thus, I urge all to wake-up and rise from the spell of the financial charlatans! Yes, let us emancipate and become financially free!

Being financially free is key to fulfilling dreams and aspirations. When we become enslaved to debt, we fulfill the desires of our masters—bankers, financiers, lenders—our creditors. By submitting to the burden of debt, to the cruelty of penalties and interest charges, just to fulfill our instant desires, we sacrifice long-term needs, dreams, aspirations, our future.

Becoming financially free should not be the privilege of the few; it should be our right, the right of every citizen. America should be a nation of financially free citizens if we want to continue to call America the Land of the Free.

We have a shared destiny. We need to be free in all aspects, especially freedom from debt. We all need to be financially free. It should be within everyone’s reach.

Over the past decades, even by an Act of Congress, bankers and financiers are required to reinvest in their communities through the Community Reinvestment Act (CRA). Many banks have representatives that go to communities to teach financial concepts; they put on financial seminars, they have websites that talk about savings, investing and spending. They appear to be interested in the financial welfare of the community. So, one question begs an answer. If banks are really interested in the financial welfare of their communities and individuals living in their communities, why are so many people in debt? Why do banks and credit card companies allow cardholders to pay their debts over many years and only requiring low monthly payments? Why do they charge exorbitant interest rates?

Thus, I believe it to be disingenuous for bankers to bear the standard of financial freedom when history and time show that they failed. On another front, it is a conflict of interest for them to spearhead financial training when their livelihood depends on financially ignorant consumers. They are not interested in financially savvy consumers.

Therefore, financial Literacy and education should be delivered by caring, disinterested parties; no foxes should be allowed into the hen house.

Financial education should begin at home. Parents should inculcate in their sons and daughters the values of financial freedom and fiscal responsibility. It should then continue at school from Kindergarten to the twelfth grade. Later, it should carry on in colleges and universities. No one should graduate with three diplomas: an educational diploma, a student debt diploma, and a credit card debt diploma.

We should have an aim that no student should graduate from high school without fiscal responsibility and financial discipline. Students should be exposed to the values of thrift and frugality, budgets and controlled urges, delayed gratification vs instant gratification. These values are the foundation for financial freedom. Every student should have a goal: to be financially free.

It is sad to say that our current culture does not value thrift and frugality like other nations; it values short-termism, instant gratification, and immediate satisfaction. Other cultures value savings, long-term thinking, thrift and frugality. To shift from spending to saving will require time and a concerted effort by parents, students, educators, politicians, government agencies, the media, the community at large, and above all each individual citizen of the United Sates. It is a collaborative task that needs to become a priority.

Eddy A. Sumar, MBA, CCE, CICE, and CEW, Founder of ER$ Consulting Services in Rancho Cucamonga, California; an award-wining, experienced International Trade Financing Consultant. Mr. Sumar is an author and motivational speaker.

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