Talking to Helaine Olen About ‘The United States of Debt’

“You have to stop thinking of debt as an individual problem and understand it as a societal issue.”

Last week, I wrote about Helaine Olen’s new Slate Academy series The United States of Debt.

The United States of Debt: A Slate Academy

This series, which is only available to Slate Plus members, includes the following:

—Six in-depth podcasts, each featuring Olen in conversation with academics, authors, and experts, along with Americans from all over the country

—Illuminating essays, articles, interactives, and book excerpts to help get more out of what you’re listening to

—A private Facebook group for thoughtful conversation with your host and fellow students

—Transcripts of each full episode

After raving about the podcast last week, I had the opportunity to chat with Olen about The United States of Debt and ask her a few of the big questions I had after listening to the introductory episode.

The following is a lightly edited version of our conversation:

What prompted you to set up The United States of Debt, and what do you hope to discuss with this series?

I think anybody who’s familiar with my work knows I’m very concerned with this notion of blame in our money culture. What impelled this is that there are a lot of people, as we know, with a lot of debt in our society. Student loan debt has doubled in the past decade, credit card debt is going back up after going down for a period during the aftermath of the Great Recession, medical bills continue to percolate, and housing continues to remain a tough spot for people.

I wanted to explore how all of this debt happened to us. There’s this idea out there—a lot of people are convinced that our main debt problem is simply consumer debt. You buy too many lattes, you go to the store too often, you take too many vacations. I wanted to explore how people really get into debt in the United States.

I was going to ask what you think people get wrong when they think about debt, and you just answered it! Are there other things we overlook when we think about debt?

I think we don’t realize how we view debt as a moral issue. I think we do it almost instinctively in our culture, because that’s how it is presented to us, and it almost doesn’t occur to us to think of it any other way.

In turn, that leads to a lot of shame around the issue, a lot of people not discussing their debt publicly, and that’s stuff I really wanted to get at in this series.

Rebecca Rosen just had this piece in The Atlantic about how our culture requires us to spend to “the brink of what we can afford.” Not everyone jumps on to this cultural pressure, but a lot of people do—and I’m curious if you think part of the reason why we are so far in debt is that “the brink of what we can afford,” in terms of student loans, housing, and so on, now include so many debt sources.

That’s a chicken and egg question. If the debt wasn’t there, would costs be going up as much? The chances are—and I would argue personally—probably not. If there were no college loans, we’d have to figure out a way to pay for all of this. Either that, or no one would go to college!

On the other hand, there is certainly pressure to give the best to our children, there’s no question about that. How we define the best is an issue.

I was curious about it mostly because it’s like, nobody has any money left at the end of the month, but now we have the option to have no money left at the end of the month and put things on the credit card.

Right. It’s very hard to separate out. There’s no question that we spend more money when we put stuff on the credit card; the surveys and behavioral economists will tell you that. It’s less painful. We find parting with cash an experience akin to pain. We do not get the same feelings from swiping a credit card—or, for that matter, using virtual credit cards! Who swipes anymore?

The first thing I will always tell anybody who’s trying to reduce their spending—and keep in mind that I understand a lot of spending is unavoidable, but to the extent that it is avoidable, the first thing I will say is “Don’t walk around with a credit card, don’t put it in your phone, don’t put it on websites,” and so on. You want to make it as hard as possible.

I can give you my own personal story: we’ve all been in gazillions of hacks at this point—I’m exaggerating slightly—and I find that in that week or two where I have to manually re-enter the credit card on my websites, I definitively order less stuff! There’s no question about it.

It makes a lot of sense. If you’re sitting at your laptop and you have to get up and go find your credit card instead of having the number memorized, you will put that thing off. You’ll walk through a door and forget what you wanted to buy.

Or you’ll say “I’ll do it later,” and later never happens.

I also wanted to ask you about the role of government in how much debt we carry. I was struck by the dates you listed in the introductory episode of the podcast: debt doubled between 2000–2007, which corresponded roughly with the Bush administration, but then college loans went up in the past ten years, which corresponded with the Obama administration.

Does the government play any role in this? Is it a bigger role than we think? Or are these numbers just correlations?

Government plays a huge role! The biggest role it plays is coming up in the episode that will debut next week, and it has to do with credit cards.

Back in the 1970s, which is probably before you were born, there used to be this thing called Usury Laws. You wouldn’t be able to charge interest over certain rates, and the rates depended on the state you were in. If I was in South Dakota, which was the first state to remove its usury law, and wanted to loan money to somebody in New York, which still has usury laws, I would have had to observe New York’s law. That changed in the 1970s, and it is one of the things that directly led to the explosion in credit card debt. It’s a huge, huge thing.

Bernie Sanders, to his credit, talked about restoring usury laws during his campaign, and it got very little attention. It should have gotten much more attention than it did, in my opinion.

I am very excited to hear the episode next week!

So my last question, and it’s the Big Question: if our debt is not really about overspending on lattes, and if it is so influenced by factors outside of our control, should we just accept that carrying a consumer debt balance, or carrying a student loan balance, or carrying some kind of balance is part of life now? Or should we keep working to avoid debt?

You’re missing the bigger point. You’re supposed to be asking why college has gotten so expensive, why we have the most expensive healthcare system in the First World, and why this happened to us.

It’s not “we have to accept this or we have to personally fight against it.” We’re all in this together. You have to stop thinking of debt as an individual problem and understand it as a societal issue, and then ask “how, as a society, are we going to deal with this debt?”

And will your podcast address that?

Stay tuned!

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