Debt. The sub prime crisis. Interest rate hikes – another, then another, then another, and why not another. Supposed to lower inflation, but guess what? It’s still rising.
Everyone pays on credit cards because they have no cash. Some interest rates are above 20%. By the time you pay off the balance you have paid double, triple, quadruple what the goods were worth. If you can’t pay off the balance and you reach your limit the minimum amount due every month can be up to $500.00. Five hundred bucks to keep a credit card that is crippling you. Five hundred bucks for nothing.
Suddenly it costs you two hundred dollars a week to get to work and back because fuel is so expensive and you have a six cylinder car. You want to downsize, to get a more fuel- efficient model but you can’t because you’d need a loan to buy the car and you can’t get one because you have missed your last two mortgage payments and the bank is threatening foreclosure.
You work and work and work. You have no fun. You can’t remember the last time you laughed out loud. You get a bill and your heart skips a beat. Something goes wrong – you fall ill and can’t pay the medical bills -you consider driving your car into the harbour to collect the insurance.
You say a word you have never said before – drudgery. It is a word without hope. You become aware of the increasing gap between rich and poor. You see a homeless man in the park eating garbage from a bin and have a panic attack thinking that if things continue as they are that could be you.
You grow tired of watching every dollar. Of denying the kids new shoes, of buying clothes that smell like moth balls from thrift stores. You consider selling your house but house prices have dropped and rents in your area are higher than mortgages. In under two years any money you made as a result of capital gain would be gone. And you would be back where you started when you moved out of home, except you would be twenty five years older.
As many of you know we have a shop in the Sydney CBD. The last independent CD shop in the city. We are hanging by a thread, but our loyal customers are keeping us afloat. Some of our fellow shopkeepers are not so lucky. The Reserve Bank raised interest rates several times with the aim of lowering inflation. The rises didn’t lower inflation but they did split consumer confidence into thousands of pieces. The result is that no one is spending money. In many ways it is a good thing to cut consumption but for the retailers who earn their livelihoods from selling things it is one more kick in the teeth.
Our friend, Nicos, owns the newsagency around the corner. His magazine sales have dropped by 75%. His sales of greeting cards are non-existent. There has been a steady decrease in the number of people requesting newspaper deliveries. Two weeks ago, Nicos, aged 46, had a stroke. He may not recover sufficiently to return to work. He doesn’t want to return to work. He is afraid that there will be more interest rate rises which will succeed in crushing him completely.
I mentioned a couple of weeks ago that my friend Nat was admitted to hospital suffering from a nervous breakdown. She is doing better but has admitted that one of the things that pushed her over the edge was discovering her husband had taken a business loan out against their house two years ago and was now about to go bankrupt. ‘I am suffering from fiscal stress,’ she said. ‘How can I clear all that debt?’
Where is this all going to end? Forget terrorism or global warming, it’s our debt crisis that is going to finish us off. I was ashamed to read that in Australia in 2007 there were at least 35,000 homeless people aged under 25. That’s an entire city raised on hopelessness.
George Orwell said in his 1949 novel 1984 :
“If you want a vision of the future, imagine a boot stamping on a human face – forever.”
I fear that for many people that vision of the future is already here.