To the Editor:

Yuval Levin’s “The Mobility Crisis” [March] misses one key element in today’s reduced mobility in America: the burden of indebtedness.

Americans are more indebted today than they have been since the 2008 financial collapse, when the economy was perceived as stronger, with per capita personal debt at nearly $40,000 (mortgage and consumer debt combined). The impact of these debts is profound: If you owe more on your mortgage than you could realize by selling your house, then in a very real sense, that mortgage is keeping you from going elsewhere even if doing so would enable you to get a better job. In an almost literal sense, it shackles a homeowner to his or her present location.

Consumer debt causes a similar problem because those who owe are obligated to make regular payments to avoid losing anything that secures those payments. Seeking a new job can entail unemployment for some period, and that usually means an inability to make those payments without suffering material losses.

There is also the matter of the interest charged on much consumer debt, usually more than 20 percent, at a time when savings are paid close to nothing. The interest payments required to service this debt effectively lower disposable income. Because large numbers of people are making these payments, their ability to purchase new goods and services is reduced, undermining the economy’s ability to generate jobs and making paying off these debts even more difficult.

Government policy has promoted both consumer and mortgage debt, largely by enacting policies that encourage citizens to consume more than they produce, so, here too, government is part of the problem.

There is one additional facet to the debt problem: The only way a society as a whole can consume more than it produces is if it can import the difference. In turn, there are two ways to work off the debt incurred:

1) Depreciate domestic assets purchased by those providing the imports so they, in effect, “lose” the wealth they acquire by exporting. This would require a serious bear market in those asset categories that appeal to overseas investors, but the consequences of this market would affect domestic investors as well, leading to a sharp pullback in economic activity.

2) Change the culture in both the domestic market and the exporting countries so that citizens of exporters are prepared to consume more than they produce while Americans learn to consume less than they produce. The problem here is that it requires countries with export-driven economies to change in the opposite direction to the one we seek for ourselves.

Without one of these, Americans will go further into debt, and debt service will become an even bigger portion of their personal (and the national) budgets. Since the perception of economic mobility reflects not income but consumption, having to surrender ever larger shares of their income to debt service will make it impossible to perceive any economic mobility at all.

Yale Zussman
Framingham, Massachusetts

To the Editor:

The politics mentioned by Yuval Levin, even with their perverse incentives, are not the cause of economic stratification. The real cause has to do with people’s attitudes.

As a group, those who succeed obey the law, avoid substance abuse, complete high school, and take advantage of further education or training, defer gratification, work hard, wait to have children until they are married, get and stay married, and join faith communities. And they teach their children to do the same. We used to call this virtuous behavior. Yet for the last half-century our elites have overwhelmingly refused to preach what they practice. The mere mention of the word virtue marks one as irredeemably quaint. In their effort to appear nonjudgmental, our elites tolerate, verbally approve, and even purport to celebrate personally destructive and economically corrosive behavior on the part of those who have the least ability to overcome it.

Tinkering with the incentives can be valuable, but will not significantly affect economic mobility in this country until we start simply telling the truth. Those at the bottom need to learn and internalize the behaviors that are necessary in order to succeed.

Michael Lukehart
Bakersfield, California

Yuval Levin writes:

I am grateful to Yale Zussman and Michael Lukehart for their thoughtful comments on my essay.

Mr. Zussman makes an important point about the place of consumer and mortgage debt in our mobility dilemma, though I think the problem could be meaningfully diminished through steps less dramatic than those he suggests. The kinds of reforms of higher education I proposed in my essay, for instance, could help significantly reduce future college-debt burdens for today’s younger Americans. Reforms of the government’s role in the housing market (such as replacing the Federal Housing Administration’s guarantees of risky loans with subsidized savings for first-time homebuyers to let them amass meaningful down payments, as the University of Pennsylvania’s Joseph Gyourko has proposed) could also make a real dent in the indebtedness of households in the lower middle class.

Addressing these two sorts of debt in particular would also help alleviate a peculiar political problem—that since the federal government now owns immense amounts of student-loan and mortgage debt, a generation of Americans is approaching their prime years as debtors to their government. That is no way to run a republic.

Policy changes like these are certainly less ambitious than aggressively depreciating assets or fundamentally altering America’s culture of consumption, but they also strike me as more achievable.

Mr. Lukehart, meanwhile, argues that culture matters most when it comes to poverty in America, and I agree. I am not as confident as he is, however, that having more of our elites “preach what they practice” would turn things around. Preachy elites are rarely perceived to possess great moral authority in our democratic society, and rightfully so. What matters more, it seems to me, is that local, trusted bearers of moral authority in poor communities have the freedom to preach and stand witness to the real preconditions for success, and that cold bureaucracy or centralized uniformity does not displace the kinds of local, bottom-up means of assistance often accompanied by caring moral guidance that stands a chance of being taken seriously. This is why we need to restrain the growth of the welfare state, to secure the space and freedom for local institutions to function and thrive, and to decentralize the provision of welfare—as I suggested in my essay, and as Paul Ryan, Marco Rubio, and others have proposed in recent years.

Mr. Lukehart is undoubtedly right that this would not be enough to transform the culture of poverty in America, but it would help ensure that the government is at least doing no harm and is perhaps also creating some opportunities and providing some resources for those who stand a chance of doing good. The deeper change he calls for, which I also yearn to see, would probably require nothing short of a religious revival—which has been known to happen in America, of course, but which neither he nor I can will into being.