Summary Of Debtor Nation
Louis Hyman is the author of Debtor Nation, he is the assistant professor of history at IRL School of Cornell University. This book was published in 2011, by the Princeton University Press.
Debtor Nation is about the growth of debt throughout the 20th Century. It explains how Americans gained more credit and acquired much debt.
In the 1920's there were installment credit and personal loans. Installment credit, with fixed number of payments allowed Americans to buy more of what they wanted, which in turn allowed retailers to sell more and the manufactures could make more for a cheaper cost due to volume.
Personal loans from banks were given if the person had a job no collateral was required. This made it more affordable and easy to purchase
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Loan Sharks took advantage of people, they charged astrnomical amounts of interest, such as 10 percent per month.
Automobiles were sold for cash before the 1920's , they were for the rich. GMAC (General Motors Acceptance Corp) made it possible for many consumers to own vehicles through wholesale financing.
In the early 1930's the housing market crumbled. By 1933 over 1000 morgages a day were being foreclosed on. The HOLC (Home Owners Loan Corporation)provided much needed cash. to help the mortgage market. The PWA (Public Works Administration) was founded in 1933 to inprove and build low cost housing for the poor. In 1934 the National Housing Act was passed to create the FHA (Federal Housing Administration) which accepted low downpayment and insured loans made by banks to keep the housing market stable.
After World War II revolving credit soared. Retailers issued their own credit cards. Consumers lived the good life though borrowing. Department store relied on credit to boost their sales.
In the early 1960's revolving credit came about and created large profits for retailers. Credit cards were more secure due to Credit reporting, billing and
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