$80 billion
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| — | The amount of money the U.S. spends a year to keep 2 million prisoners behind bars. Get the full story. (via centerforinvestigativereporting) |
Nowadays, the conservative media inundate us with warnings about debt from the Founding Fathers, and it’s true that some of them like Jefferson — himself an inveterate, often near-bankrupt debtor — did moralize on the subject. However, Alexander Hamilton, an idol of the conservative movement, was the architect of the country’s first national debt, insisting that “if it is not excessive, [it] will be to us a national blessing.
Imprisonment for debt was a commonplace in colonial America and the early republic, and wasn’t abolished in most states until the 1830s or 1840s… Debtors in these prisons frequently found themselves quite literally dying of debt. And you could end up in such circumstances for trivial sums. Of the 1,162 jailed debtors in New York City in 1787, 716 owed less than twenty shillings or one pound. A third of Philadelphia’s inmates in 1817 were there for owing less than $5, and debtors in the city’s prisons outnumbered violent criminals by 5:1. In Boston, 15% of them were women. Shaming was more the point of punishment than anything else.
Imprisonment for debt was a commonplace in colonial America and the early republic, and wasn’t abolished in most states until the 1830s or 1840s, in some cases not until after the Civil War. Today, we think of it as a peculiar and heartless way of punishing the poor — and it was. But it was more than that.
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Some of the richest, most esteemed members of society also ended up there, men like Robert Morris, who helped finance the American Revolution and ran the Treasury under the Articles of Confederation…
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Some of the richest, most esteemed members of society also ended up there, men like Robert Morris, who helped finance the American Revolution and ran the Treasury under the Articles of Confederation…
Believe it or not, a version of debtor’s prison, that relic of early American commercial barbarism, is back. In 2013, you can’t actually be jailed for not paying your bills, but ingenious corporations, collection agencies, cops, courts, and lawyers have devised ways to insure that debt “delinquents” will end up in jail anyway. With one-third of the states now allowing the jailing of debtors (without necessarily calling it that), it looks ever more like a trend in the making.
Debt remains, as it long has been, the Dr. Jekyll and Mr. Hyde of capitalism. For a small minority, it’s a blessing; for others a curse. For some the moral burden of carrying debt is a heavy one, and no one lets them forget it. For privileged others, debt bears no moral baggage at all, presents itself as an opportunity to prosper, and if things go wrong can be dumped without a qualm.
At a protest last year at New York University, students called attention to their mounting debt by wearing T-shirts with the amount they owed scribbled across the front — $90,000, $75,000, $20,000.
On the sidelines was a business consultant for the debt collection industry with a different take.
“I couldn’t believe the accumulated wealth they represent — for our industry,” the consultant, Jerry Ashton, wrote in a column for a trade publication, InsideARM.com. “It was lip-smacking.”
Though Mr. Ashton says his column was meant to be ironic, it nonetheless highlighted undeniable truths: many borrowers are struggling to pay off their student loans, and the debt collection industry is cashing in.
As the number of people taking out government-backed student loans has exploded, so has the number who have fallen at least 12 months behind in making payments — about 5.9 million people nationwide, up about a third in the last five years.
In all, nearly one in every six borrowers with a loan balance is in default. The amount of defaulted loans — $76 billion — is greater than the yearly tuition bill for all students at public two- and four-year colleges and universities, according to a survey of state education officials.
To get the money back, the Department of Education last fiscal year paid more than $1.4 billion to collection agencies and other groups to hunt down defaulters.
Hiding from the government is not easy.
In The Hunger Games, kids in poor families take out extra chances in their District lottery — that is, extra chances to die — in return for extra food rations; in ours, poor kids enlist in the military to feed their families and maybe escape economic doom. Many are seduced by military recruiters who stalk them in high school with promises as slippery as those the slave trade uses to recruit poor young women for sex work abroad.
And then there’s another form of debt peonage that is far more widespread in our strange and ever-changing land: student loans. The young are constantly told that only a college education can give them a decent future. Then they’re told that, to pay for it, they need to go into debt — usually into five figures, sometimes well into six. And these debts are, in turn, governed by special laws that don’t allow you to declare bankruptcy — no matter what. In other words, they are guaranteed to follow you all your life.
In The Hunger Games, kids in poor families take out extra chances in their District lottery — that is, extra chances to die — in return for extra food rations; in ours, poor kids enlist in the military to feed their families and maybe escape economic doom. Many are seduced by military recruiters who stalk them in high school with promises as slippery as those the slave trade uses to recruit poor young women for sex work abroad.
And then there’s another form of debt peonage that is far more widespread in our strange and ever-changing land: student loans. The young are constantly told that only a college education can give them a decent future. Then they’re told that, to pay for it, they need to go into debt — usually into five figures, sometimes well into six. And these debts are, in turn, governed by special laws that don’t allow you to declare bankruptcy — no matter what. In other words, they are guaranteed to follow you all your life.
