On today's show I talk with Dr. Louis Hyman, an expert in the history of debt. Not only was it great talking with him but we chatted just as long off the air. This is one guy you'll be hearing more from in the future on this show.

We talked about the history of debt, why budgets are flawed, a historical view of bankruptcy, payday lending, loan sharks, debtors' prisons, debt peonage, why creditors don't care if you repay your debt and the role of the consumer as a cog in the economy. We also talk about the change in lending in the 1980s when lending changed dramatically so that lending itself became the end goal instead of using lending to move products to generate profits. Once this happened the goal of the lenders was to generate loans to package into large bundles to sell all around the world.

We also talk about the benefits of bankruptcy and why bankruptcy is the critical part of driving capitalism in order to minimize the risk of entrepreneurship. Without bankruptcy, many companies would be significantly less likely to take risks. But over time the purpose of bankruptcy laws have shifted but life has shifted as well. In modern life the need to have access to loans helps to drive the economy. Without bankruptcy, consumers would become so overloaded with debt that at some point the economic engine would slowdown if we didn't clear the bad loans out of the way. Dr. Hyman shares some significant insights about what has brought people to bankruptcy.

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