Where I live, a local country radio station was apparently not doing so well and was sold to another company, which continued to run country music on the station, but introduced a new twist. Their “hook” to get you to listen was that they were commercial-free country. That’s right, they ran no commercials on the station at all. And they didn’t fill up the space with pleas for donations – they didn’t ask for donations at all. They just promoted themselves as commercial-free country and played more music per hour than their major competitor.
I did give some passing thought to how this was possible. I don’t have a degree in economics or know much about the tax law, so I don’t know if there were major tax benefits that allowed them to do so. I assumed they must be losing money, because radio stations cost money to run, and wondered a few times if this was some very wealthy person’s pet project of some sort or some weird tax shelter.
And then one day, there was this little blurb from one of the on-air DJs that said that a lot of people call the station asking how they are able to be commercial-free, and the answer is that “We took out a loan. We’re going into debt. It’s the American way!”
The buyout happened in early 2007 and in 2008 they started running advertising (which they call “limited” but I haven’t done any statistical analyses to see if that is true) so I guess the American Way wasn’t working out for them quite like they had planned. In fact, I’m still not sure what the plan was, or if there was even a plan. But I digress.
When did debt become the American Way? I know it can’t have always been like this. Is it when the government started accruing debt they couldn’t pay off? Was it when home prices became high enough to standardly require mortgages? Was it because of the introduction of credit cards? If so, thanks a lot Diner’s Club. But somewhere, somehow, debt did become not only an accepted but an expected part of living the American Dream.
A house, two kids, a white picket fence, and SUV with a loan on it (or leased) and a wallet full of credit cards that carry a balance. Oh, don’t forget the second mortgage.
I know that not everyone is in that position. I’d guess that a significant portion of my readership does not accept debt as a way of life, even if they are still in debt themselves. There’s an awareness of alternatives and the knowledge of the stress and heartache debt can cause. But American society as a whole? That I’m not so convinced of. There are lots of ways that debt seems completely accepted, and many transactions in which it seems expected. I remember when I was in my PhD program and the professor that was my advisor bought a new car with cash. First of all, all the grad students and techs we all in awe that someone could actually do that. And second of all, he told us how the dealership was confused, surprised, and then incredulous, it just wasn’t done. Not that he’s the only person to buy a new car with cash in the history of the world of course, but for where I lived it was outside the realm of normal experience.
Debt as the American Way. Significant debt as a means to live the American Dream. When did things come to this?
As an additional note, a few of my fellow bloggers wrote just yesterday on the effects they see of government as well as consumers choosing debt as the American way, check out their perspectives:
- DebtFREE Revolution: Too Much Debt.
- Credit Withdrawal: Are You Mad at the FED? Good! But Be Mad For the Right Reasons!