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Tuesday, October 18, 2011

You Are A Debt Serf - Where Is Robin Hood?

Are you a debt serf?  You know, those people in the middle ages that were raped and pillaged at will by Lords, Dukes, Counts, Kings!

Well, most Americans, whether they know it or not are debt serfs and are one step away from debtors prisons (yes we supposedly got rid of those but .....).

The typical American household is insolvent: its debts exceed its assets.  Yes you are probably bankrupt!  You work hard your whole life and you are still a slave to the man with the money (you know, those top 1% of earners in America that are so opposed to higher taxes, at least on them).

Calculating insolvency is simple: if debts exceed assets, the enterprise is insolvent/bankrupt. By this measure, most American households are dead beat, bankrupt, insolvents (if you were to actually mark down their real estate assets (your house) to what it is actually worth). The typical American household is thus in service to its debt, not to its assets, and to the holders of that debt (those rich 1% of Americans - shockingly usually Republican - who are complaining about higher taxes while you wonder whether you can afford to feed your family).

This is debt-serfdom: serfdom in service to the owners of debt, debt that may well always exceed the value of the household's assets. This is debt-serfdom for life.  In those old movies we would be referred to as "peasants", but that sounds so unpleasant, so let's just call it the "working class."

If we look at the American household as an enterprise, then we have to differentiate between unproductive, trapped capital, assets held in a house or retirement account {which constitutes most Americans}, and productive, free capital which can be moved in and out of productive assets to earn a return which increases free cash flow income in the present {again its those "job creators" to which the Republicans like to refer - the top 1%}.

Unfortunately for the ever growing number of American peasants, wealth and income do not flow from servicing debt incurred by trapped assets, it flows from productive free capital. Thus the typical household toils not to increase productive capital that can be deployed to increase household income but to service their crushing debts.

Does this sound like some one you know?  A family friend, a brother, sister, parent?  The average 50 year old has about $2,000 saved for retirement (sure to be enough to afford a box to live on the street corner).

How else can you describe this situation other than debt-serfdom?

Is their a Robin Hood out there who will stand up and tell the rich that they are no longer the landed gentry and that robbing from the rich to give to the poor is an age old story?  Only question is whether they will agree with Warren Buffet or go down like Marie Antoinette?

There are many in the top 1% that say they want to pay their share of taxes. Buffet isn't the only one speaking the obvious moral choice. We have Matt Damon, Barbara Streisand, Chelsea Handler, Bill Gates the lists goes on and on. Not to mention of course the democratic party, they just can't get it done because they are being cock blocked by the right.

The problem with all these celebs saying " I want to pay my fair share" is that they are just words. Sure it is the right thing to say. Many of them I'm sure mean what they say. However, just saying it means shit.

Take for example Chelsea Handler, who had tweeted that "as a person who makes a lot of money she supported the Buffet taxes.  Yet when someone suggested she just should just go ahead and pay her share now she cruelly called him a moron.  See below:
Chelsea Handler Tweeted: "As someone who makes a lot of money, I would like to go on the record and say I support the Buffet Rule. I'm happy to pay more taxes. Any other celebrities feel the same
"Richee Tweeted: "Then take your money and pay the taxes. No reason to wait."

Chelsea Handler Tweeted: " In order to pay more taxes, the laws have to change. You don't donate money to the government moron.
I already pay 50%. I'm WILLING TO PAY MORE."
Why can't a Buffet type self-organize a movement to set up a non-profit/private organization where they would contribute this difference now and the non profit organization funds would go directly to help pay the deficit. So instead of waiting for some tax change that will never happen, do something now.


  1. I like your last paragraph the best. American citizens need to dictate their voices by demanding and creating private-non-profit organizations to provide a solution for all of the wealthy that say they want to pay their share. It sounds like a very logical solution.

  2. I must admit I often say I am willing to pay more. Just like how Obama says it. Obama is trying to do something about it but is being blocked.

    I know I could do more than just saying I should have to pay more taxes than a secretary making far less money but pays a higher tax rate.

    How does one start an organization like you mention?

  3. Ms. Lately sounds rude and full of empty words. She says she pays 50% tax rate? Is there even such a tax rate? Betty

  4. The article is scary if it is true. It IS like the country is headed back to time of the royals and the peasants. No wonder streets everywhere are full of protests. Randy

  5. Why don't you the writer of the blog be the Robin Hood? You at least look like you could play him in a movie. :) Seriously you should try to rally a movement for an organization like this. Jasmine

  6. In the mean time everyone better work hard to re-elect Obama or it will only get worse. Interesting article. I enjoy reading your articles.

  7. The Chelsea Handler example does point out well how easy it is to just say things because it is the hip liberal thing to do. "As a person who makes a lot of money I support the Buffet taxes." Do you think she enjoyed saying she makes a lot of money? For her to call a person with a suggestion a "moron" shows a mean spirit. Total turn off. I used to think she was funny.

  8. Citizens should rally to create change like you speak of. Let all these 1% people who say they want to give their fair share of taxes put their money where their mouths are!

    So easy for Matt Damon to say " guys like him should have to pay more."

    Then he does nothing about it.

  9. I'm not sure if I qualify as a peasant or 1% tax man based on the blog. I make over 250,000 a year. I am married with three daughters. Two are currently in college and the last born is only one year away from college. We will have three tuitions to be every year. My wife is school teacher and she brings in another 50,000. We bought our current home in 2004 for 650,000. Our house is currently valued at 490,000. We have under 10,000 in savings. We live pay check to pay check. We have a second mortgage on our house. We have over 100,000 in credit card debt. Our income puts us in top 1% income but in know way to we feel rich. We struggle to stay floating. In my opinion 300,000 combined income is middle class in our current economy. I think the taxes should be raised on the top 1% of the 1% . There is a vast contrast between earning 300,000 a year and 20 million dollar wall street bonuses. Taxes should be on a sliding scale starting with highest percentage of taxes taken from the richest scaling all the way down to little or no taxes for people earning under 30,000. It seems like the only moral alternative. I certainly have lost faith in the American dream.I don't blame Obama for these conditions. I blame 8 years of the Bush dynasty for putting all of us except the super wealthy in the poor house. SO I guess I am debt surf! This is a very depressing reality.

    Disillusioned in Denver