Let’s take a look at how we have ended up so heavily in debt as a nation of consumers.

Easy credit

In the past, it was simply too easy for consumers to obtain credit.  Because credit was so easy to get, consumers figured out how to leverage their credit card rewards and balance transfer cards in order to make money. Many tried to perform credit card arbitrage by taking out cash advances and balance transfers from these cards, then investing the amounts into a rising stock market. This was one of those things you’d consider to be a “sign of the times.” Of course, things are different today, but the 2000s was a decade during which our debt ballooned due to these types of products. Subprime loans, jumbo mortgages and other forms of costly debt are inventions of our capitalistic society; these are high-risk financial tools which countless consumers have gambled with, often with dire results.

Need for instant gratification

As a society, we’re impatient. It’s ingrained in us to be able to get immediate access to the things we covet, even if we can’t really afford these things at the moment. We live in a highly consumerist society that encourages materialism and is not ashamed of excess. Have you seen just how huge the portions are served in most American restaurants? It’s all about more, more, more right now! So it’s often the case that funds that should wisely be funneled into highest interest savings account or into high yield savings are instead being used to keep up with the Joneses, a syndrome that many of us harbor, and which has caused many a household to fall into debt.

Lack of financial education

Personal finance isn’t given importance in schools. A lot of us don’t learn about finance while in school and instead are picking it up through experience and trial and error. Unfortunately, this lack of understanding and awareness about money management can make us vulnerable to making many financial mistakes, particularly those that land us in debt.

Lack of accountability

It’s too easy to procrastinate about our finances, go in denial or sweep things under the rug when we get into trouble. But also detrimental is when we can’t take responsibility for our own actions and mistakes. We blame the government or the financial industry for causing the rifts in our economy, but we’re just as guilty about causing the crisis as they are. Both lenders and borrowers contributed to the subprime lending boom, subsequent bust and credit crisis, but guess who’s getting the lion’s share of the blame?

Debt as a cultural phenomenon

In other cultures, debt is heavily frowned upon and is only gingerly used by households. But in America, debt is socially acceptable and ingrained in our culture; it carries no stigma. If bankruptcy, foreclosure, debt and being broke are things we easily accept in our culture and way of life, then these aren’t things we’d readily condemn (or worry about) until too late or until we’re forced to face the painful consequences.

When the economy blew up last year, it prompted the government to start making some changes; they’ve since introduced policies that help regulate the financial industry to some degree (e.g. credit card rules) but in many respects, it’s still pretty much “business as usual.” Instead of worrying about what the Fed or Obama is going to do next, we should focus on the things we have control over, and take responsibility for our own financial predicaments.