And perhaps the answer is to make borrowing more costly and saving more profitable through higher interest rates.

I'm not sure how higher interest is supposed to help them. According to your logic, payday lenders are doing poor people a favor.

If you asked people 20 years ago they would say compounding interest that massively exceeds inflation is evil. Nowadays people are worried about low interest being a problem because of their wholly incomplete model of economics that doesn't even address unavoidable natural monopolies like location.

The land market is inherently inefficient. That fact was papered over by high interest rates. Instead of paying the landlord huge sums, you paid the banks huge sums. Now that interest isn't going to the banks it's going to the landlord again.

The solution is obvious. Tax monopoly rights with a pigovian tax. The mythical free market in consumer goods only exists because of well written property laws. The mythical free market in land doesn't exist because the existing property laws are written extremely poorly.

Debt isn't always bad. It's a powerful tool (leverage), and bankruptcy shouldn't have a stigma.

We need people to be financially educated. We teach calculus in schools but very little on finance. Perhaps that's changed since I was in high school, but for me, it was non-existent.

Debt should be for doing interesting things. Like if you are expanding your business. It shouldn't be needed in the steady state. Poor people don't do interesting "events" economically be definition! Truly, to be poor is "stuff happens to you", not "you happen to stuff". The vast majority of people should not need loans.

If we want people to be more "creative" we should achieve that with firstly with more leisure team for hobbies. No faux-entrepreneurship hustle culture. No trying to "acculture the poor" with extrinsic rewards, when rich kids have the luxury of not having the intrinsic rewards beaten out of them. Let people have hobbies. Let people involve their neighbors and pool their UBIs for the bigger-scale ones. Let no one need debt to survive.

We should go "common core" on calculus. The essence to understanding economics right is stocks vs flows, and even if people never learn "this method of solving integrals, they should be able to see a graphed function, and draw it's rough derivative and integral. It's an essential skill. They should also know how to ride bikes and kinesthetically learn this stuff on hills. It is an essential toolkit of thinking, no symbols or formalism needed or wanted.

> Debt isn't always bad.

I know the mantra of our financial system that creating debt also creates opportunity, but that is certainly detached from reality if used to form a general rule. For a average Joe, debt is exclusively bad. For states? They have more possibilities. But at that point we are talking about completely different forms of debt.