The indebtedness and the current international financial crisis

In this paper, I will talk about the phenomenon of indebtedness and how, according to the general opinion of experts, led to the current international financial crisis.

The financial crisis that began in 2007 is considered the biggest economic crisis since the Great Depression of 1929. Since then the progress in economic science have allowed the world economy to live decades of high economic growth interspersed with some crises without major impact, and quickly resolved without serious consequences to the global economic system. Unfortunately, the growing integration of the various parts of the world in trade channels has made ​​that the economy has never been so globalized as now. As a result, the man now has even more difficulties to analyze, monitor and control the global economic system.
So if the Great Depression is still a matter of controversy as to its causes and consequences, the analysis of long-term effects of the current crisis, obviously will not be free from ambiguities.

From savings to indebtedness

Until very recently, don't have any debt was reason of pride, and very well regarded socially. Therefore, the indebtedness of economic agents was scarce. Until the twentieth century, savings and austere way of life characterized the way of living of the population. Until it came the phenomenon  of consumer credit, which allowed the expansion of the financial sector, to the gigantic dimension we know today. Despite being a new phenomenon, it seems that economic agents quickly learned how to enjoy it. 
And as can be seen by what is currently happening, even the states themselves quickly caught the taste of resorting to credit, the point of most of them being plunged into a spiral of indebtedness from which present difficulties to exit.

the universalization of the financial system

served as an octopus in the spread of the crisis.

Although the principles on which consumer credit and investment is based are good - allows families to increase their level and quality of life through the consumption of goods that were restricted before, allows companies to obtain financing to invest in existing or new business and innovation - the truth is that was the rampant indebtedness and without imposing any limit which led in 2007 to the current financial crisis.

 How was it possible to receive credit such adherence?

As I mentioned, the change was very rapid. In a few decades, the common practice is no longer the savings to become the indebtedness.
There are several reasons for this adherence to credit:

1) emerged from the World War I  the mass culture, which presented a lifestyle turned for the general public, and a new social class has gained importance - the middle class. For this same reason, the general population seen in the credit the hypothesis to purchase the goods and services featured in the new media and everyone else had, and allowing them to have a level and quality of life own of the middle class. 

2) On the part of creditors, these improved the existing financial instruments and developed new instruments more attractive, while improved forms of risk protection.
Furthermore, using the massified media, flooded the population with marketing campaigns that incite credit.

3) The typical receiver of credit has also changed. Until the nineteenth century the (few) agents who contracted loans were agents with considerable economic power and wealth, usually for members of the nobility or the wealthy bourgeois families. 
With the universal credit and the proliferation of credit agencies, any economic agent started to have access to credit without imposing barriers or restrictions.
If on one hand it was beneficial for the redistribution of income, and enabled many people to improve their living conditions, on the other hand, the lack of guarantees from those who sought loans, led to the loss of large sums of money, and the failure of both the creditors as debtors agents.

This led to a loss of confidence in the banking system as much as the strength of the economy, undermining the ability of agents' consumption and undermining the economy negatively.