Re: Debt = Bad
"And as Tom 38 answered, cheap credit wasn't the cause, inappropriate lending was. Mortgages being given to people who were at very high risk of not paying them back"
And the whole house price bubble which powered this was driven by cheap credit. Various govts., including HMG, were addicted to low interest rates. We had the utter stupidity of Brown setting BoE the task of setting interest rates to control a measure of inflation which excluded housing costs. As a lot of the prices contributing to that measure were of products whose manufacture was being outsourced to China etc. those elements were falling, measured inflation was low and interest rates were low. Low interest rates drove up house prices and people were remortgaging on the basis of their inflated house prices just to get their hands on "cheap" money.
Forget the risk of not paying the mortgage back. If the punter can't do that the lender takes the house and sells it to recoup. It produces a housing crisis but not a financial one. What really does the damage is if the house is no longer worth what was lent on it. If the house prices are overinflated when the loan is made it doesn't take that many repossessions to deflate them so the lenders can't get their money back.
Way before the crash it was clearly unsustainable to anyone who gave a thought to it. Unfortunately there were too many involved who weren't inclined to give a though to it
And we stll have a housing bubble.