Fun fact: Subprime auto loan bonds are in a slow motion trainwreck:
http://money.cnn.com/2016/03/15/investing/subprime-unpaid-au...
http://www.bloomberg.com/news/articles/2016-03-21/this-is-wh...
And if you don't run any debt, it's like having zero body fat in cold climates. No insulation, and any caloric deficit causes much more severe problems.
Nobody said it had to be simple.
Also, isn't the accumulation of body fat the definition of a surplus, rather than a deficit? In both cases, having run a surplus in the past provides protection for when you must run a deficit in the future.
Furthermore, are you suggesting that, a metabolic analogy is more correct than a household-finance analogy?
1) The debt is eclipsed by GDP rise over time. 2) A government ( at least used to ) be able to very slightly weaken its currency to equalize for GDP and population growth. 3) Mild inflation acts to equalize the effects of private debt as well.
I use the metabolic analogy because the risks of no body fat and low body fat are quite different, much as the risks of mild inflation and no inflation - or more accurately, deflation - are quite different.
http://www.theatlantic.com/magazine/archive/2016/05/my-secre...
Do you budget your money out and track every transaction? It sucks to be in that situation, but there are always things you can do to improve it.
It's hard to go bankrupt from this directly because they're careful not to lend you more than you can pay back. It doesn't always work, of course, but they do a decent job of figuring that out.
Note that a lot of medical bankruptcies aren't bankruptcies due to medical bills alone, but are people with insurance who go bankrupt due to a combination of deductibles, additional non-medical expenses related to the illness, and a sudden reduction in their ability to work. Having a bunch of credit card debt instead of a bunch of savings could easily put someone in that situation, so the two probably work together a lot.
We have not yet come to terms with the fact that the overwhelming majority of people outside of a tiny sliver of elites are going to be lucky to afford bare subsistence in the years to come. Credit card debt lets us delay confrontation with the reality that wages have not grown enough, employment is not strong enough for most people in middle-class jobs to live the lives we used to think of as middle class.
Of course you reach for plastic before you stop buying groceries.