James Surowiecki has a fantastic article in the New Yorker about why Americans take on so much debt. Incentives work and we have incentives to use debt embedded in our financial structure. I’m a big fan of his writing anyway, but this short piece explains a lot.
John Kenneth Galbraith wrote that all financial crises are the result of “debt that, in one fashion or another, has become dangerously out of scale.”
That’s his thesis and in a couple of paragraphs he explains how we got there so efficiently.
