Ask economists how much debt is bad and you will get vastly different answers. There is genuine reason for confusion. See the arguments surrounding for example

Ask economists how much debt is bad and you will get vastly different answers. There is genuine reason for confusion. See the arguments surrounding for example the bailout of Swedish (previously) and British banks (currently) - some consider it generically a bad idea to bailout for fear of debt generated but in the Swedish case it paid off and appears to be paying off in the British situation too. This sort of debt was useful right? But because it's a difficult question the easiest answer is to consider debt generically bad, and it is absurd at at least two levels. Firstly, one shouldn't have to describe why lending and reciprocally debt is useful. You also have to ask what else could have been done and the "all debt is bad" brigade usually waffle. Secondly, the cause of the financial crisis was "bad debts" in the form of incredibly risky securitisation schemes. Why the hell were risky loans repackaged as triple A securities. It's like making coins out of butter and bills out of sugar paper. The wailing and gnashing of teeth of how it's our own greed caused this is just a smoke screen for the way the regulation system, capitalism and the chain of involved politians let everyone down. Then people think a penance should be paid in terms of austerity - unfortunately that austerity is as likely to cause even more pain down the stretch.