Why Living Debt-Free Was Normal Then But Impossible Now скачать в хорошем качестве

Why Living Debt-Free Was Normal Then But Impossible Now

1960. Average American household debt: $4,500 (mostly home mortgage). 2025. Average American household debt: $104,000 (mortgage, student loans, credit cards, auto loans, medical debt). What changed? Why did the generation that lived through the Depression and World War II carry almost no debt, while their children and grandchildren drown in it? The common answer: "People were more responsible back then. They lived within their means. Today's generation is entitled and wasteful." The real answer: The economic system was completely different. Debt was less necessary because costs were lower relative to wages, and less available because credit was restricted. When the system changed, debt exploded—by design. WHY DEBT WAS LOW IN THE 1950s-1960s: 1. HIGHER WAGES RELATIVE TO COSTS In 1960, median household income was $5,600. Median home price: $11,900 (2.1 times annual income). Today, median income is $75,000, median home price is $420,000 (5.6 times income). In 1960, you could buy a house with a small down payment and a mortgage paid off in 15-20 years on one income. Today, even two-income households struggle with 30-year mortgages they'll never pay off. College tuition at a state university in 1960: $200/year. Today: $10,000-30,000/year. A student could work part-time and graduate debt-free. Today, 70% of students borrow an average of $30,000. The cost explosion REQUIRED debt. 2. LESS AVAILABLE CREDIT Credit cards barely existed before 1960. Bank of America launched BankAmericard (later Visa) in 1958. Widespread adoption didn't happen until the 1970s-80s. Before credit cards, you couldn't easily borrow for consumption. No credit card? You bought what you could afford with cash. This enforced discipline automatically. Store credit existed but was limited—you charged at one store, paid monthly, and they cut you off if you didn't pay. Banks rarely gave personal loans for consumer purchases. Auto loans existed but required 30-50% down payment. Furniture and appliances? Layaway plans—you paid over time BEFORE taking the item home. 3. CULTURAL SHAME AROUND DEBT Depression-era values dominated. People who lived through the 1930s saw foreclosures, bank failures, poverty caused by debt. They taught their children: "Neither a borrower nor a lender be." Debt was shameful. Paying cash was virtuous. Saving before buying was moral. Being "in hock" meant you'd failed. This wasn't just psychology—it was survival knowledge from recent experience. The culture reinforced economic necessity. 4. DIFFERENT SPENDING EXPECTATIONS People owned less. One car per family (if that). One TV. One telephone. Smaller houses (1,000-1,500 sq ft average vs. 2,500+ today). Fewer clothes. No $1,000 smartphones. No $200/month cable/internet/streaming bills. No $6 daily lattes. Lower consumption meant less need to borrow. Expectations were different. Keeping up with Joneses meant a neat lawn and new car every 5 years, not constant upgrades and lifestyle inflation. 5. NO STUDENT LOAN SYSTEM College was cheap or free. California's university system: no tuition until 1970s. State schools elsewhere: $100-500/year. Many students worked part-time and graduated debt-free. Federal student loan program (1965) started small. The explosion came in the 1990s-2000s when tuition skyrocketed and loans became easy to get. The government CREATED the student debt crisis by guaranteeing loans, which let colleges raise prices endlessly. WHAT CHANGED - THE DEBT EXPLOSION: 1970s-1980s: THE CREDIT REVOLUTION Credit cards became ubiquitous. Banks discovered they could make huge profits on interest (18-29% rates). They mailed pre-approved cards to millions. Spending on credit became normal, then expected. Average credit card debt per household: $0 in 1960, $8,000 by 2000, $15,000+ today. 1980s-1990s: DEREGULATION Banking deregulation removed limits on interest rates, fees, and lending practices. Predatory lending became legal. Payday loans, subprime mortgages, zero-down car loans—all became standard. Lenders actively encouraged debt. Debt shifted from shame to strategy ("good debt" vs. "bad debt" replaced "no debt"). 1990s-2000s: COST EXPLOSION Housing costs increased 400% while wages increased 60%. College tuition increased 1,200%. Healthcare costs exploded. Childcare became essential (two-income families) and unaffordable ($1,500/month average). Wages stagnated while costs of big-ticket items (housing, education, healthcare) skyrocketed. Debt became necessary, not optional. 2000s-2010s: FINANCIALIZATION #Debt #StudentLoans #CreditCards #PersonalFinance #EconomicHistory #DebtFree #FinancialLiteracy #WageStagnation #CostOfLiving #HousingCrisis #StudentDebt #1950s #BabyBoomers #Millennials #DebtCrisis #Capitalism #Economy #FinancialFreedom #MoneyHistory #AmericanDebt