The title of this piece is taken from a bumper sticker that was issued by the Production Credit Association back in the early 1980s. PCAs are part of the national Farm Credit System that was originally set up in 1916 by the federal government to provide capital for farming. At that time, long-term loans for buying farm land were virtually non-existent.
PCAs, as their name implies, were intended to supply medium and short-term credit to finance actual production. In my years of farming (1976-1992), I used the local PCA to borrow money not only to finance equipment purchases, but also to buy seed, fertilizer and fuel to actually plant the crops.
The theory was that when the crops were harvested there would be enough money left over to pay off the production loan, a theory that was not always proved true in the depressed agricultural market of the 80s. Throughout the 1980s I was just one natural disaster away from ruin, but the PCA kept me afloat until the horrible weather of 1992 mercifully ended my farming career.
The bumper sticker was apparently intended to tell borrowers not to worry about all that. A secondary meaning, of course, was that as citizens and taxpayers we are all indebted through our various levels of government. Ironically, in the early 1980s our national debt was only about $1 trillion or about $4,200 per man, woman and child alive at that time.
It seemed like a lot then, but in 1980 our debt was actually at a proportional 50-year-low at less than 40 percentage of our Gross National Product. Today, with new bailouts seeming to grow our debt by a trillion dollars a day, we are returning to New Deal era levels of national debt upwards of 90% of our GNP. While our population has grown to 300 million, our current national debt of 10 trillion has soared to something over $33,000 per person at last count.
Even so, collectively, the government is doing better than our individual households who are reported to be in debt at a rate approaching 120% of household income. Are you there yet? Add up the balance on your mortgage, car loans, credit cards and miscellaneous loans for home improvement, education, debt consolidation or whatever. Do you make that much a year. I sure don’t!
When looking for the villain in the Great National Debt Unwinding currently playing at a financial institution near you, we all might want to start by looking in the mirror. As that great philosopher Pogo said, “We have met the enemy and he is us!”