Utang in America: Filipinos and the debt deal
SAN FRANCISCO—The debt ceiling debate, which finally got resolved this week, raised issues and questions that are, in some ways, familiar to many U.S. Filipinos.
The past three years have been rough for many of us, after all.
After more than 20 years of a steaming hot economy, the party came to a painful end. People lost their jobs, lost their homes, forced to go bankrupt.
So what does one do in these hard times? You have to scale back on spending, save more, and maybe even work an extra job. But how do you scale back? What items do you cut from the family budget?
I’ve always been averse to debt, to utang. I suspect it’s partly because I was raised by an accountant father and an Ilocano mother. As a ‘starving’ graduate student at UC Berkeley, I didn’t use a credit card — only cash.
So in a way, I understand the position of those legislators who want the US government to ‘live within its means.’
But as a journalist, a working person, a taxpaying citizen, and even a parent, I know it’s not that simple.
The cuts that are expected to come out of this debt deal are widely expected to hurt programs meant to help those in need. I’m personally worried about the deal’s near-term and long-term impact on schools and education in general.
There were tough compromises made to raise that debt ceiling. Could those compromises cause the whole roof to come crashing down?
Now, I’m not crazy about paying more in taxes. Still, I certainly would be willing to pay more in order to strengthen public schools and public universities.
But to hear proponents of deep cuts also try to block raising taxes on those who can clearly pay more and must pay more has also been mindboggling. For in the U.S. today, in their view, the rich should not be called “rich people.” They’re “wealth creators.”
(Can you imagine calling the greedy landlords and unscrupulous business big shots who dominate Philippine society “wealth creators?”)
The past two decades offered valuable, sometimes painful, lessons in how to view and deal with money and utang.
Getting into debt was easy for many years. So easy. Credit card companies would actually send you fat checks. All you had to do was deposit it in the bank. And if you had a house, there was always equity to be tapped. A house was not just a house, it also was one giant piggy bank.
There were some who paid a steep price for getting too used to the good times. I once wrote about Elena and Samuel who tried to ride the real estate boom — and got stuck with 18 houses and a whopping mortgage burden.
But their experience was an extreme example. And despite the hole they found themselves in, Elena and Samuel still focused on what’s important: Taking care of their families here in the U.S. and back in the Philippines.
That’s one thing that’s probably troubling about the debt ceiling debate to many Filipinos.
Utang is something we dread, and work hard to avoid. But there are times when we know we need to go into debt to provide for family, or even to help a friend or neighbor.
In these hard times, when U.S. Filipinos are struggling to get out of a bad mortgage or to pay off huge credit card balances, many still juggle their finances in order to keep a child in private school or to spend for extracurricular activities, while still sending money to family back home.
And that’s because these expenses for education and learning are not to be seen as luxuries. Hindi luho. They’re investments for the future of their children.
And the money sent to family back home? Many don’t see those as a form of ‘entitlement’ that can be cut just like that during hard times. The money goes to real needs. Sometimes life-and-death needs.
My friend Mars Estrada, a Bay Area psychoanalyst who has counseled Filipino immigrants and has a keen understanding of the Filipino psyche and Diaspora, explained it this way:
“Marami sa atin ang mangungutang kahit di gusto. Many of us would go into debt even if we don’t want to, if it’s for the livelihood and development of our relatives and families, and yes, even for distant relatives and neighbors. … We still value the concept of indebtedness, not just in the pure business, economic sense. It is still laden with strong familial, social, relational, even affective sense. .. Despite the economic crisis, we continue to help our relatives in the Philippines, whether we see it as an investment or not.”
In tough economic times, of course, the best path is still to live within one’s means. To save and plan. To make every cent or centavo count.
But when that’s not possible, it’s also worthwhile to remember that there are good debts, and there are bad debts. There’s smart utang, and there’s really dumb utang.
A super-expensive, gas-guzzling, luxury sports car. No doubt about it, in my humble opinion: dumb utang.
But music or sports lessons for our kids, or books or educational programs or maybe even an overseas trip that would help broaden their horizons?
Definitely, for Filipino parents who see their children’s education as a non-negotiable need smart utang. One that fits into a balanced approach to wrestling with the tricky, frustrating world of money and responsible indebtedness — with the future in mind.
Not totally sure that’s what happened this week.
On Twitter @KuwentoPimentel.
