When we paid off our mortgage last year, I briefly wondered whether it was really a good idea. I knew that most people were running around with as much mortgage as they could service with their paychecks, and quite a bit of credit card debt to boot.
I knew that when the shit hit the fan, there would be a lot of pressure on government to orchestrate some form of massive debt forgiveness, and that we, as non-debtors, would be relatively disadvantaged under such circumstances.
Now, don’t get me wrong; life is good. We’re debt-free, and we have about three times as much house as we need. We both drive low-end, car-style SUVs that are paid for.
But we don’t have everything we’d like to have. I’d like a new MacBook. I’d like a big HDTV. I’d like a 7-foot Steinway for the living room. My wife would like an iPhone, a hot tub, and probably a swimming pool. I can easily come up with a list of things I’d like to have that add up to the average household’s consumer debt.
Why shouldn’t I have an even bigger house? Why shouldn’t I be driving a Mercedes? Especially if the government is going to bail us all out?
I’m sure there will be a hue and cry for some sort of consumer bailout. I’m sure that those of us who aren’t in debt will wind up getting screwed. On balance, though, I’ll sleep a lot better between now and then than someone who’s ducking phone calls from collection agencies.
Barry Ritholtz presents a moral argument on behalf of the debt-free: