Debt is a tool of oppression
He was widely documented this debt is often used as a tool of oppression. Across centuries and geographies, powerful elites have used debt not only as a means of profiting, but also as a means of silencing and coercing the working class.
When the The Spanish crown banned slavery of Indigenous peoples in 1542, settlers circumvented this mandate by placing Indigenous peoples in debt to ensure they would remain in bondage. Similar and widespread exploitation was used as a tool for all settlers to maintain power and steal land from indigenous communities across the Americas. The debt peonage of Indigenous peoples is certainly a glaring example of how debt has been the basis of a form of oppression, but examples abound of how it happens on a daily basis in our own lives.
Take, for example, student debt. The unreasonable cost of a college, even a formerly public one, requires loans of disabling capital and compound interest. Although federal student debt interest rates are set by Congress, they interval from 4.53% for undergraduate loans to 7.08% for parents, graduates or professional loans. These rates are shocking in themselves, especially since the average interest rate for a 30-year fixed mortgage is 2.8 percent. Meanwhile, interest rates on private student loans – ranging from 1.2 to 14.5 percent – are not. Either way, interest rates can worsen over time, further burying people in debts that are becoming increasingly impossible to repay, much like the debt of Indigenous peoples in the 16th century. Until today, Indigenous students who have taken out loans for their studies also face the impact of crippling student debt and the trauma and financial effects of wealth theft – including the theft of land by indigenous people – and are once again disproportionately affected by these issues.
Or consider consumer debt more broadly, now at a heartbreaking $ 14.6 trillion. Credit card interest rates are so under-regulated by federal and state governments that the credit card industry has pushed people further into poverty by disguising extractive debt as the democratization of credit. Current interest rates are at an average of 16.12 percent, a third of borrowers paying interest rates above 20%. Those who pay interest rates of 20% or more are more often than not the lowest paid and the most marginalized among us. Usurious interest rates – which could be better regulated or removed entirely -, coupled with poverty wages, are the perfect storm to keep people overworked, exhausted and trapped in a largely inescapable cycle of debt and repayments.
A recent American Psychological Association study found that people in debt are more likely to face health problems caused by stress, anxiety and depression. According to the same study, 64% of graduate students say their debt keeps them from performing at their best. Even more worrying, 1 in 15 borrowers with senior leaders considered suicide. Debt is debilitating for old and young alike, preventing the young from developing their capacities reasonably freely and the old from enjoying their âgolden yearsâ.
Perhaps the most breathtaking and obvious example of the use of debt as a tool of oppression in the United States is when the state of California cut public funding for the university’s higher education system. of California and raised tuition fees, all to suppress the ever-growing students. uprisings in the 1960s. In a campaign speech in 1966, former President Ronald Reagan, then candidate for governor of California, warned protesters of the Vietnam War and the newly enacted university fees by calling them of “A small minority of beatniks, radicals and defenders of disgusting speech.”
Shortly after being elected governor of California, he oversaw the growing privatization of the school system from 1969 with the institution of tuition fees and a 10 percent a cut in state funding, in addition to firing the president of the university system, who had supported student protests. The introduction of tuition fees, the reduction of state funding, and hence the shifting of the burden of funding higher education to the individual, all served Reagan’s goals of political disempowerment and social control. . Additionally, as black and brown students demanded access to public higher education in the wake of the civil rights, black power, and Chicanx movements of the 1960s and 1970s, debt-funded colleges were particularly hard hit. harshly on their families. To date, student debt hits black and brown families disproportionate to their white counterparts.
In the latest stimulus package, Congress recently had an opportunity increase the minimum wage at a meager $ 15 an hour, raise the wages of 32 million people in the United States, offsetting the need to use credit cards to purchase basic necessities. When wages fail to cover the cost of living, we are forced to take on more debt to make ends meet. When our society demands that its citizens have a university degree in order to get decent jobs but without the means to pay them, we are forced to take out bad loans. Failure to write off student debt, regulate interest rates reasonably, and raise the minimum wage all lead to one conclusion: those in power have something to gain from taking us into debt. . This something is our work, our time, our well-being and our freedom.
Let’s be clear. Canceling student debt, regulating reasonable interest rates, raising the minimum wage is a difficult choice. It is the choice between the oppressor and the oppressed. It is a choice between servitude and freedom. It is the choice between an operating company and a decent company.
Amy Czulada is a union research analyst and member of the Debt Collective. Follow her and the organization on Twitter at @ aczulada1 and @Strikedebt.