The story of personal debt in modern America
Before the twentieth century, personal debt resided on the fringes of
the American economy, the province of small-time criminals and
struggling merchants. By the end of the century, however, the most
profitable corporations and banks in the country lent money to millions
of American debtors. How did this happen? The first book to follow the
history of personal debt in modern America, Debtor Nation traces the
evolution of debt over the course of the twentieth century, following
its transformation from fringe to mainstream--thanks to federal policy,
financial innovation, and retail competition.
How did banks begin making personal loans to consumers during the Great
Depression? Why did the government invent mortgage-backed securities?
Why was all consumer credit, not just mortgages, tax deductible until
1986? Who invented the credit card? Examining the intersection of
government and business in everyday life, Louis Hyman takes the reader
behind the scenes of the institutions that made modern lending possible:
the halls of Congress, the boardrooms of multinationals, and the back
rooms of loan sharks. America's newfound indebtedness resulted not from
a culture in decline, but from changes in the larger structure of
American capitalism that were created, in part, by the choices of the
powerful--choices that made lending money to facilitate consumption more
profitable than lending to invest in expanded production.
From the origins of car financing to the creation of subprime lending,
Debtor Nation presents a nuanced history of consumer credit practices
in the United States and shows how little loans became big business.
