Tess Vigeland:….Today we’re starting with the question of why and how we became this nation of borrowers and exactly when debt lost its social stigma.
Dave Ramsey: It’s roots are in the 70s, when debt became a product that was marketed by some of the most masterful marketing minds that the planet has ever known. The selling of debt as an absolute necessity to live, is really one of the most masterful marketing jobs in the history of the world. We live in the most marketed culture in the world and the most money and the most sophistication used to sell any product, is used by the banking industry.
The credit card people have done a phenomenal job of integrating their product line into our psyche to where we truly believe that we can’t live without it. That’s amazing marketing. THat began in the 70s. It took deep roots in the 80s and by the 90s we were seeing five and six billion credit card offers a year going out to where, dead people and dogs were issued on a regular basis.
Debt / Credit is the root of capitalism. The church is ill equipped to confront the other God in our culture.
I say this as someone who believes in a commercial society. But without debt, no market.
I am thinking about building a medical office building as opposed to renting my present space (for what I consider an astronomical sum). I can’t do this without going into debt. I wonder what Dave Ramsey would say about this.
And John, we did quite well before the 70’s when everyone wasn’t in debt to their eyeballs and didn’t have negative savings rates.
[blockquote]I am thinking about building a medical office building as opposed to renting my present space (for what I consider an astronomical sum). I can’t do this without going into debt. I wonder what Dave Ramsey would say about this. [/blockquote]
I think Ramsey’s more down on credit vehicles that encourage a routine living beyond one’s means as opposed to debt that is used to finance a productive, possibly appreciating asset.
Much of God’s teaching about debt/interest is in the OT; and if we are not going to believe in some aspects of life, it seems only natural that we would reject it in this as well.
I believe there is senseless debt and sensible debt. Borrowing to take a big vacation or to put in a swimming pool trades future income with little to show for it (swimming pools are notoriously bad investments). On the other hand, Robroy will have an asset to show for his debt. We used debt to buy our house, we have paid off the mortgage and now we have a fine asset.
We use credit cards rather than carrying cash or checks or debit cards because of the security. But the credit card bill gets paid in full every month before anything else (after thithe of course).
Dave preaches the downfalls of debt as he should because the providers of debt vehicles only preach the upsides of course.
Robroy: Mr. Ramsey believes strongly in investing, but preaches your occupation should always be your main source of income – enough to keep up with your expenses and savings. If you have enough extra to absorb the potential negative consequences of taking on the debt of your investment (such as you have to pay the whole set of loan payments because nobody else rents in the building), then he might concur with doing it. However, he made his living – and his downfall – in real estate before became a ‘get out of debt prophet’, so you should call his show and ask the question.
Going through his ‘Financial Peace University’ course was close to ‘life changing’ for my wife and myself – and hopefully will pay huge rewards to my children.