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Debt: What It Is and Why We Fight It

David Graeber, Mike Konczal, Sarah Jaffe and Brian Kalkbrenner discuss debt--what it is, why we're drowning in it, why it's a political issue. Moderated by Astra Taylor.

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Kalkbrenner: The Occupy Student Debt campaign is doing a lot of outreach work to campuses across the country and is making a lot of connections to other activist groups. Here you have a massively organized group that’s ready and able to work on this campaign. You provide a conduit for people to get involved with it and change will happen.

Taylor: David, should we just abandon the concept of debt altogether?

Graeber: Well, yeah. There are stages. One of the critical things I’d really like to know right now and that I think would be really useful to spread as far and wide as possible is how much of the average American’s life income ends up getting expropriated by the financial sector. I’ve been trying to get these numbers and, sure enough, they’re almost impossible to come by. One thing I’ve been really fascinated by with Occupy Wall Street is why is it that the plight of the recently graduated indebted student suddenly speaks to a New York transit worker and all these other people who’ve been in solidarity with us? Which it probably wouldn’t have done thirty years ago. 

I think there’s a fundamental shift in the nature of capitalism, where some people are still using a very old-fashioned moral logic, but more and more people are recognizing what’s really going on. They just don’t know the extent of it. It’s not even clear that this is capitalism anymore. Back when I went to college, they taught me that the difference between capitalism and feudalism. In feudalism they take the money directly, through legal means, and they just shake you down, pull it out of your income, and in capitalism they take it through the wage, in these subtle ways. It seems like it’s shifting more toward the former thing. The government is letting these guys bribe the government to make laws where they can pick your pocket, and that’s pretty much it. The best figures I’ve seen indicate that maybe 19 to 20 percent of incomes are now going—if you count interest payments, if you count all these fees they put in there, if you count insurance fees, if you add everything up—they’re taking about a fifth of your total life income. For nothing. For financial services of one kind or another. And of course, that hits some people more than others. So if you’re looking at these gross numbers, that means that for anybody who isn’t prosperous, it’s a lot more. 

The other interesting thing I saw, however, is that that number shrank really rapidly. I saw 13 percent actually goes in interest payments—13 percent of people’s income—and that went down to 9 percent in two years since 2008. There is massive popular resistance on the individual level, just detaching yourself as much as possible from credit card debt, from the other more extortionate payment loans, other more extortionate forms. So it’s happening. People are starting to do it, just out of sheer necessity. I saw the figures; it was crazy—it went up, up, up, and then [exploding noise] like that, over the last two years. The challenge is giving political voice to what people are already doing by pointing out that they’re not alone, and also just point out what’s going on.

Taylor: OK, it’s question time. We have a few minutes here for questions.

Audience member 1: I just have a question regarding the tuition raise: Why is it 400% within the past twenty years? Is there a logical, layman’s term answer for that?

Kalkbrenner: I don’t know if there’s a simple answer for that. But it’s a good question—I’ll point out that up until the ‘‘70s, CUNY was free. And so was the University of California system. There’s a lot of reasons why wages are stagnant and why the increase is so much, but it’s interesting—at the Baruch action last month, which happened the same day we launched our campaign—you probably saw the Baruch students being attacked by police—as we were walking to it, I overheard somebody saying, “What’s the big deal? It’s $300”–because CUNY had voted to increase tuition by $300 every year for the next five years—and so, well, anybody who knows, anybody who is in debt knows that the difference between paying one bill and another bill, and on top of that paying $1,500, is a hell of a lot of money, especially for what’s supposed to be a university which serves a low-income and also middle-income student body.

 
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