Oooh conspiracy! Is it possible that the government has a deliberate policy of encouraging people to spend more than they earn? The signs could certainly be explained in that way. They’ve allowed mortgage companies to gradually relax their lending criteria in all sorts of ways, they don’t force lenders to assess income before they provide unsecured loans or credit cards and, in 2004, they relaxed the bankruptcy laws so that people can wipe clean their debts and be discharged from bankruptcy in just three to twelve months. You could even argue that the government’s failure to educate people about saving, investing and the dangers of debt is all part of the master plan.
In the short-term, which is what politicians live for, it is a sound policy to keep people borrowing and spending at about the present rate, in order to sustain economic growth. The thousands of people driven to bankruptcy will just blame themselves, so it’s win-win for the government….