01/25/2012 11:24 am ET | Updated Mar 26, 2012

A Brief History Of Debt

If you listen to our grandparents, in the old days nobody ever borrowed. Angelic models of virtue, they bought only what they could afford. The Great Depression had instilled values in them that these young people today just do not have. On some level, older Americans consider all this borrowing to be a moral failure without precedent.

The historical record would beg to differ. In my new book, "Borrow: The American Way of Debt," I show how personal debt became widespread in the 20th century--and it didn't just happen in the past few years. Paradoxically, it was the very prosperity of that postwar generation that enabled so much borrowing to occur because it was in the postwar that bankers began to discover how profitable it could be to lend to consumers. The good wages of the postwar made profitable borrowing possible. As those good jobs faded, the borrowing remained. Unlike our parents and grandparents, we borrow but we just don't earn enough to pay back what we borrow. But don't let my words convince you.

Personal debt