Debt is one of the most powerful forces in personal and global finance. Use these questions to explore when debt is a tool and when it becomes a trap.
Is all debt bad? What is the difference between debt that builds wealth and debt that destroys it? Give one example of each from your own experience or observation.
Try to use: productive debt, consumer debt, leveraged investment, interest rate, return on investment
Credit scores determine what loans you can get and at what rate. Have you ever checked yours? Do you think credit scoring systems are fair — or do they perpetuate inequality?
Try to use: creditworthiness, credit history, risk premium, interest rate spread, access to capital
The 2008 financial crisis was triggered by mortgage lending to people who could not repay. Who was most responsible — the borrowers, the banks, the rating agencies, or the regulators?
Try to use: subprime, securitization, AAA rating, due diligence, conflict of interest
Some economists argue debt is essential for economic growth — without credit, businesses cannot expand and governments cannot invest. Do you agree? What is the alternative?
Try to use: credit-driven growth, capital formation, leverage, debt cycle, investment
What is a debt trap and which people or countries are most vulnerable to falling into one? How do you know when debt has crossed the line from manageable to dangerous?
Try to use: debt-to-income ratio, debt spiral, refinancing, insolvency, debt relief
"Too big to fail" — banks were bailed out with public money in 2008 because letting them fail would have been catastrophic. Was this the right decision? What does it tell us about how the system is designed?
Try to use: moral hazard, systemic risk, bailout, privatize gains, socialize losses