East Bay Fights the Creditor Class

By Keith Spencer

There is an old one-liner that goes, “Buy this car to drive to work; drive to work to pay for this car.” Nowadays, a similar reasoning could be applied to college: “Take out loans to pay for college; go to college to get a job to pay off loans.”

Mountains of student debt change the purpose of college—from a time of intellectual exploration and cultivation of critical and humanistic thinking to career training. Student-loan debt—which doubled from $55.7 billion (in 2011 dollars) in 2001–2 to $113.4 billion in 2011–12—discourages students from studying any field that is not applied and encourages the perception of college as a private good rather than a social one. This attitude erodes democracy, which is predicated on having an educated citizenry capable of making informed voting decisions.

DSA is targeting student debt, which is a crucial part of a four-walled debt prison that traps us all. The image of a “debt square,” appropriately colored red, was adopted by the activist group Strike Debt, an offshoot of Occupy Wall Street, in 2011. The four corners symbolize student, medical, housing, and credit card debt, obligations that create virtual debt bondage for large numbers of people. Debt bondage—working in bondage to one’s creditor—stretches back to recorded history. In our own country, some estimate that almost half the colonists in what became the United States arrived as indentured servants who worked to pay off the price of their passage. But debt bondage wasn’t limited to ocean passage, and those whose crops or businesses failed or who suffered reverses could end up bound to work for their creditors until their debts were paid off. Sometimes, because of interest, this could mean their whole lives. Often, the debts of indentured servants could be passed on to their children.

Although indenture was outlawed by the 13th  amendment, as Carnegie Mellon University professor Jeffrey J. Williams notes, students are, in effect, the new indentured servants. Public student loans will be forgiven upon death if there is no money in the estate to pay them, but private, unsecured student loans are one of the few types of debt that cannot be abolished even in death. Bankruptcy does not discharge either private or public student debt. Like the indentured servants of the colonial age, many young Americans will be legally bound to assume the student debts of their parents if their parents’ estates do not leave enough to pay them off.

Almost half the country lives beyond its means and owes more than $10,000 per person in personal debt (not even counting cars and mortgages). This makes us a debtor nation or creditor society, but whatever you call it, creditors have the upper hand. And to a creditor, basic human rights—to education, health and housing—are private goods that we must spend a lifetime paying for.

We can see the end game by looking at Detroit, where the state, under right-wing Governor Rick Snyder, appointed an unelected manager who chose to pay off creditors—rich financial institutions—before paying the pensioners and city employees who spent years working for the city. Similarly, in the 2008 and ongoing financial crisis, the U.S. government bailed out banks—creditors—over people who suffered from their predatory actions.


In the Bay Area, a network of debt activists has been fighting across multiple fronts to educate about the issue of debt. The East Bay DSA chapter is involved with a number of groups related to student and household debt activism, including Strike Debt and East Bay Solidarity Network. One of the main goals of debt activists is to illustrate how personal and institutional debt connect. Speaking recently in Berkeley, Strike Debt activist and New York University Professor Andrew Ross blasted the double standard for banks and people: “Banks take out loans which they are never expected to repay, whereas individuals are held responsible and pressured to repay or suffer consequences.”


The power of creditors is also used to promote privatization.  Financial institutions fought for and won the Orwellian-named Postal Pension Reform Act of 2006 that would artificially bankrupt the United States Postal Service (USPS) by requiring prepayment of pensions for 75 years into the future. East Bay DSA has been closely involved in the struggle against privatizing the Berkeley Post Office. Protesters, including many DSA members, camped outside the beautiful Art Deco building in downtown Berkeley, leafleting passers-by and encouraging them to activism. Their efforts and those of others around the country have paid off. In response to public and union resistance, Congress blocked the immediate sale of USPS buildings. The fight against debt is difficult to wage.

We live in what Ross calls a “creditocracy”—a society in which the money-lenders possess the power and their ideology goes unquestioned; hence, activists must work to fight the shame that comes with having debt, encourage openness about one’s debts, and point out the hypocrisy and immorality underlying the logic of the creditor class.


Keith_Spencer2.jpgKeith Spencer is the executive editor of PopFront, a left coast political magazine. He has also written for Full Stop and Dissent. He lives in Oakland, Calif., and manages the Facebook page for national DSA.



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