It's a huge stretch to pin that on the proliferation of credit.
> In the off chance that they are able to save for retirement, tax law makes it something you don't want to draw from until you're retirement age. If you have a 401k, for example, and withdrew from it to purchase a car, you're going to be expected to pay the tax on the money you put into it immediately.
Uh... good? 401(k)s are tax-advantaged to encourage using them for what they're for. And if you really, really need the money, a 10% penalty on top of the taxes you legitimately owe on that pre-tax money is nothing. The real hit comes from losing all the future gains and the inability to "replace" that money the way you can with some other tax-advantaged instruments.
It's a huge stretch to pin that on the proliferation of credit.
Most people reading these comments aren't the average person. We live in a privileged bubble where we have the income that generates the possibility of being able to own property.
There are far more people living paycheck-to-paycheck with the "assistance" of a credit card than we would like to admit.[0] If there weren't, the Fed wouldn't have injected so much money into the economy during the pandemic. They did so because the average person doesn't have the savings to not work for a month, and because the US federal government doesn't have the savings to give out the money as funded by tax revenues.
[0]https://www.bankrate.com/finance/credit-cards/living-paychec...
Second question's answer: No. They're not. 40 years ago the powers-that-be in the American financial system decided it'd be a great thing for their balance sheets if everything was turned into a purchase on credit, and for purchases that were already on credit (homes, cars, business capital, student loans) to draw even more in the way of fees. Meanwhile, everything's become more expensive (as it can be on credit) and wages have remained stagnant.
In the off chance that they are able to save for retirement, tax law makes it something you don't want to draw from until you're retirement age. If you have a 401k, for example, and withdrew from it to purchase a car, you're going to be expected to pay the tax on the money you put into it immediately.