It is very common these days for individuals to end up in debt. Common debts are credit card debt, student debt, and mortgage debt. For the typical aspiring youth looking to get a good job and eventually own their own home, student and mortgage debt are nearly inevitable. For renters, a debt is created each month that needs to be quickly paid.
The capitalist system will greatly encourage its members to take on debts. The central bank makes policies that enable the banks to lend out money at low interest with only fractional reserves. This is because the system benefits from its members being in debt. Why is this? Because for capitalism to work, there must be a large reserve of poor workers eager to work. If everyone was wealthy, the system would collapse as companies could not find any workers to hire. Having a debt to pay off makes one eager to work hard.
Having a someone be in debt is an excellent way to keep them as a good worker. The worker in debt will usually discipline himself in order to pay off his debt. He will rise early each workday, put in a hard days work, obey his superiors, and not quit even if conditions are barely tolerable. This is because he wants desperately to earn the money needed to pay off his debt. His hard work enables two main things: One, the wealth generated by his labour power trickles up into the hands of the wealthy owners (for he is always paid less than the value of his work), and secondly, he pays lots of taxes.
Imagine a worker with no debt, and no rent, and some savings or say some earnings from investments. He might take years off to travel, switch jobs frequently as his interests in life change, and not work overly hard (as he would have less fear of being laid off or fired). Yikes, perish the thought! Better make sure he gets loaded with debt as soon as possible!
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