Saturday, August 10, 2013

In Debtor Nation: The History of America in Red Ink

IN THE FIRST QUARTER of 2011, the average American household carried $115,000 of mortgage, credit-card, and other forms of debt—a huge sum, but less (because of the recession) than the figure for the third quarter of 2008, when the average family owed more than $125,000 to financial institutions and other organizations. This enormous ocean of red ink has become big, big business. In both the go-go years of 2006 and 2007, for example, the nation’s largest credit-card issuers earned more than $18 billion—more than Wal-Mart or Microsoft.

In Debtor Nation: The History of America in Red Ink, Louis Hyman, Ph.D. ’07, reconstructs the history of personal debt in modern America. This is a fascinating, important, and at times ominous story. It begins around 1917, when personal indebtedness existed at the fringes of the economy, the province of struggling merchants and loan sharks, and ends in our own time, when personal debt has become a cornerstone of economic and capital-market activity, and the center of the recent financial crisis.

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