Forty years ago it was pretty rare for a person to use credit on anything but a house or vehicle. Most daily transactions were made with cash. Larger ones a cheque. If you had the money you could spend the money. If not you waited and saved until you did.

The funny thing is that we had a substantial savings rate driven by people saving up for big purchases and the proverbial rainy day. This meant the banks had cash to lend out. Now we have a savings rate that hovers between zero and negative numbers. Nobody saves up to buy a car. last time I bought a vehicle the man was shocked that I paid with a cheque and offered to go to the bank and get cash.

Of course I'm told that easy credit is 'progress'. Even though using credit almost always increases the actual price paid. A neighbor got one of those rent-to-own deals on a TV. When I multiplied out his payments he will have paid about three times what you could buy the same TV set for if you paid cash.

He made the same money as I did. If he would have just saved what he would pay the rental place he could pay cash, own it outright, and do it in just a couple of weeks. But he wanted the TV set now.

Which is, in a nutshell, is how we got into this mess.