"(T)o say that the individual is culturally constituted has become a truism. . . . We assume, almost without question, that a self belongs to a specific cultural world much as it speaks a native language." James Clifford

Tuesday, February 11, 2020

On the Social Psychology of Rising Credit-Card Debt: A Reflection of American Society?

It is perhaps too easy to point to economic reasons for an increase in debt within a society. The Wall Street Journal reported during the first quarter of 2020 that credit-card debt in the U.S. “rose to a record in the final quarter of 2019 as Americans spent aggressively amid a strong economy and job market, and the proportion of people seriously behind on their payments increased.”[1] The record $930 billion, according to the Federal Reserve Bank of New York, was “well above the previous peak seen before the 2008 financial crisis.”[2] After critiquing the economic explanation, I will suggest that a social-psychological mentality or attitude may be behind not only the rising debt, but also other disappointing manifestations in the contemporaneous American society more broadly speaking.
The U.S. economy between 2001 and the third quarter of 2007 had been “weaker, overall, than its performance in the equivalent years of the 1990s.”[3] So if spending aggressively (a rather strange expression) amid a strong economy and job market in 2019 led to the record in credit-card debt, why was the debt level higher in the 2001-2007 period than during the 1990s? Furthermore, why wouldn’t a weaker economy result in more buying on credit and a jump particularly in serious credit delinquencies? In actuality, the fourth quarter of 2019 saw only moderate growth of 2.1 percent, a full percentage point below the comparable figure from the year’s first quarter. The softening of domestic consumer spending and the low unemployment rate of 3.5% should result in more credit-card debt being paid off rather than added. Going on economic factors alone takes on the look of a twisted pretzel.
I submit that a creeping pathological mentality in the some segments of American society, or perhaps outside of society, may be another, steadier trending factor. Specifically an attitude toward money and personal responsibility may have been spreading during the 2010s among the working poor. I cannot offer any empirical evidence, so my theorizing can only be considered as an initial sketch. Even so, the rough sketches of the attitude itself can be revealing with respect to personal responsibility and other people.
The attitude, which I have observed on number of occasions, includes the decision not to utilize self-discipline in the face of instant-gratification, which in turn may be felt as coming all-at-once as if overwhelming once a paycheck is received. Self-discipline may simply be dismissed as if it were an exogenous bad odor. In actuality, that odor comes from the attitude itself. The ensuing behavior is to spend too much of the paycheck without concern for money that will be needed before the next paycheck arrives (not to mention any concern to put some money aside in case of unemployment or an emergency).
In 2019, I listened more to the jobless poor who received government checks. I found that in many cases, they most or almost all of a check all at once. In many cases, they would turn to selling drugs and going to food-banks (and selling food stamps) to have money well into the month. That the mentality in spending virtually all of a check can point to an underlying mental illness suggests just how problematic the underlying mentality is. In retrospect, the consequent increase in serious delinquencies of credit-card debt can be viewed as a symptom rather than as the problem. Another “red flag” concerning the seriousness of the mentality occurred to me when I realized that the non-working poor are so very poor they are the most vulnerable financially, and a significant number, at least from my observations, displayed such flawed judgment in spending recklessly, as if they could offer no resistance to the instinct for immediate gratification. The mentality may thus be oblivious to external context and even the internal context of the mentality’s own bad judgment.
Regarding the working poor, people who display a failure of judgment concerning how much credit-card debt to add or have given the amount of the pay may also 1) have an implicit assumption that money is rightly for free (the extreme being conducive to theft), 2) believe that society owes them so they can rightly assume debt without any intent to pay it back, and 3) feel little or no responsibility to people they don’t know, including the owners of the credit-card companies and others. This extremely narcissistic attitude is entirely comfortable in violating Kant’s ethical notion of the Kingdom of Ends, by which other people are to be treated not only as a person’s means, but also as ends in themselves. Accumulating credit-card debt as if the companies’ concerns were of no significance turns the rational beings running and owning the companies into mere means to the person’s flawed decision that such money is and should be free, without obligation on the person’s part. If the counterparty is hurt, it is easily dismissible as “not my concern.” The mentality is thus not conformable to society and its implicit social contract.
I submit that the impact of the sordid mentality is evinced in not only the taking on of credit-card debt either recklessly or without any intention of repaying it, but also the increase in prison populations and drug use, and the general declining trend of civility toward strangers in public. In other words, the records in credit-card debt may be a few data points that together with other data may suggest the underlying mentality whose baleful manifestations running through American society are broader than generally thought.




1. Yuka Hayashi, “Credit-Card Debt in U.S. Rises to Record $930 Billion,” The Wall Street Journal, February 11, 2020.
2. Ibid.
3. Aviva Aron-Dine, Richard Kogan, and Chad Stone, “How Robust Was the 2001-2007 Economic Expansion?,” Center on Budget and Policy Priorities, August 29, 2008. (accessed February 11, 2020)