Easy money

Robert Samuelson writes that with the Fed steadily raising interest rates, the age of easy credit is coming to an end. Good thing, too:

In 1946 households had 22 cents of debt for each dollar of disposable income. Now they have $1.26. Behind these numbers lies a profound social upheaval: the "democratization" of debt. Everyone gets to borrow. But this process may have reached its limits.

The banks have done a superb job erasing the stigma of borrowing:

The origins of today's credit culture date to the 1920s and the advent of installment lending for cars and appliances (stoves, refrigerators, radios), says economist Martha Olney, author of "Buy Now, Pay Later." Attitudes changed. In the 19th century, "it was thought that only irresponsible families bought on credit," she says. "By the 1920s, it was only foolish families that didn't buy on credit and use it while they were paying for it." In the mid-1920s, 60 to 70 percent of cars were sold on one- to two-year loans.

PBS had a great Frontline special on the credit industry and the tactics they use to keep people charging and in debt. Ben (“Bueller?”) Stein said that he pays off his credit card every month and people like him (and me) are ironically called “deadbeats” by the credit industry.