After determining that the actual national debt is essentially infinite, Kevin D. Williamson over at the Corner starts talking about private debt, and how fuck you for having it:
There’s about $1 trillion in U.S. credit-card debt out there, much of it securitized. The charge-off rate (the portion of defaulted debt credit-card companies abandon as unrecoverable) doubled from 2006 to 2008, and just about doubled again from 2008 to 2010. Asset-backed securities based on credit-card debt are kind of an interesting creature, to my mind, anyway. Mortgage-backed securities ultimately have a house attached to them: an asset that can be repossessed, held, sold, etc. It’s not like credit-card companies can repossess that $200 bar bill you put on your Visa.
Given Uncle Sam’s precedent for relieving troubled banks of distressed assets, it’s not impossible that a lot of that private credit-card debt will end up as part of the public debt, on Washington’s books somewhere. I suppose debt is debt, but I’m going to feel a little better about debt financing an aircraft carrier than debt incurred by a late-night nacho run.
Yes, the main things dragging people into credit card debt are their drunken orgies at nacho bars. I can’t tell you how many times I’ve woken up with a maxed out credit card and black bean dip smeared all over my nipples.
From an informal observation of, you know, human behavior, it strikes me that most people in credit card debt get hit by a perfect economic storm: stagnant wages, rising costs of living, and a series of hard decisions that have to be made in the moment. It makes sense to charge your electric bill to your credit card when you need to swing both groceries and lights in the same week. You might get the insane desire one holiday season that it would be nice to see your family, and so you charge the trip…and something else comes up.
Too much of the discourse on credit card debt is focused on the Confessions of a Shopaholic model. It’s fun to think that everyone with $10,000 in credit card debt spent it on Air Jordans and Prada which they dropped giant globs of nacho cheese on and subsequently burned, but I’m pretty sure that if you looked at the credit history of many people in deep debt, you’d find a lot fewer charges for HDTVs and bottle service, and a lot more payments to cable providers, utilities, repair shops and doctors.
Of course, that will change when Obama finally maxes out the nation’s credit cards on Boone’s Farm and Coogi sweaters. Until then, let’s take the moral high ground on this.