It was one of the biggest stories on Wall Street this week. The number of Americans who are struggling to make payments on their federal debt is shrinking at a record pace. And by all accounts, the pace is speeding up. Just last month, the American Bankers Association warned that delinquencies on home loans and other consumer debts have hit an all-time high.
The problem? If you’ve got a debt, the government doesn’t have to help you. And when that debt gets worse, the government doesn’t have to help you either. “The debtors are just becoming more and more difficult,” says Robert Willens, a Los Angeles-based accountant and business writer. ”
The problem is this whole government structure where the government takes your money and they give you the money, and they do not have to give it back. Because they think you’ll pay it back, the taxpayers never do.” The result: the government has become the country’s biggest creditor and its biggest debtor. And the way it collects its money is also changing. In the 1970s, the IRS could garnish a portion of your paycheck for past-due taxes.
But these days, that power has been stripped from the agency, because it’s been deemed too intrusive. The agency was also given extra authority last year to demand past-due medical bills. The agency doesn’t actually have to seize your paycheck. It just puts the money in a special account, and at some point, if you still don’t pay, they seize it and take it. So for those who rely on Social Security or Medicare, some unexpected bills could be a shock. ”
As we get older, we get sicker,” says Willens. “We don’t understand this situation where the government is giving you Social Security benefits, and in some cases, medical benefits. But they don’t say, ‘Oh, by the way, you have to pay some of these bills.’ The government does not have any moral obligation to you. “Now that we’re in this place where we are dependent on the government, we’re dependent on the government taking our money and giving it back to us and taking care of us.
And to the extent that’s the case, it can’t be good,” Willens says. Willens also points to a long line of famous cases in which wealthy Americans fought back and successfully sued the federal government. He says it’s time to do the same for other Americans — and he’s not the only one asking for change. His book, “Your Money or Your Life,” has been one of the best-selling books in America. But the message is not new to him. Willens worked in Washington for many years and says he saw the big problem up close. And it made him wonder how this whole problem could be addressed. That’s when he decided to write the book that would become “Your Money or Your Life.” When the book first came out, it was widely reviewed, but one thing it did not focus on was that Willens himself was a high-powered corporate lawyer who practiced in New York City for nearly a quarter of a century.
In his law practice, Willens represented the wealthy. And it was there that he learned how powerful money is, especially when it comes to influence. “You have to figure out what the real interests are,” he says. “It’s very hard to find out what is real money and what is real influence because they’re not the same thing.” Willens says that when he was in Washington, he saw how the laws affect different people, but the laws he saw affecting the wealthy affected those without any power at all.
And it changed his thinking. So after 15 years as a lawyer, he took a deep breath and put the law books aside to consider how we can all have real power over the money we create. He’s spent time studying the power of money and decided it is best exercised as a true power, to help ourselves and others to be better than we are today. And that would mean moving beyond the narrow view of money as being for investment only. Money should also be viewed as a power that has the potential to transform our world. “I think it’s important that people realize money and power are different and can sometimes be at odds with each other,” Willens says. “And that they should find out where they agree.” In a way, Willens says, we have found it out.
We now have the information and the skills that can be used to help others become empowered financially. He says with education and understanding, we can create a better world, especially when it comes to money and power. “I think we can become better at this than most of us were in the past,” he says. “We need to start learning about money. We need to start learning about power. We need to start having conversations about these things. And we need to share these learnings and use them as our tool.”
Willens isn’t calling for a return to the gold standard or even calling for the elimination of fractional reserve banking. He says he’s fine with interest being earned, and for having a market that’s free of government interference. “This is not going to be a perfect world, but it can be a better world,” he says. “This is where we have to get it. This is where the rubber meets the road. But I think we are finally making some steps in the right direction. And that’s the most important thing. We need to get ourselves in a place to realize this is what we want.” There is a lot of work to do, but I’m optimistic that we will get there.canvas
This is a critical moment. Our generation of consumers has to learn a lot more than how to buy. We’re facing a challenge that the vast majority of us can’t see, and it’s a challenge that has the potential to disrupt us, our economy, and our government. Maybe the best legacy my generation can leave is for the people of the next generation to learn and figure it out.