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"... Debt still attracts easy moralising and apocalyptic warnings, but it always has to be considered alongside one's income and assets. It may be prudent for a young family to borrow, if they reckon their wages will go up over the next few years. As author Frank Trentmann shows, the golden age of credit in America and Britain was in the postwar decades, when both economies were growing fast and workers were seeing their pay rise year on year.
"However – and this is beyond the purview of the historian - that is not the case in either country today. Instead, the debt being taken out is being taken out on promises of growth that modern capitalism cannot deliver.
"Encouraged by their governments, households in the UK and the US are now using their homes as cash machines. Using official statistics, the Centre for Research into Socio-Cultural Change has found that the value of home equity withdrawal under both Thatcher and Blair exceeded the value of GDP growth during their time in power. The two losing incumbents of the past 20 years, Major and Brown, both saw housing equity withdrawal slump on their watch.
"That simple observation holds the key to explaining the post-79 era in British politics. How do you win an election? Inflate the property market. How do you mimic economic growth? Encourage housing equity withdrawal."
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