Most Americans hear the word “debt” and think of a burden. Credit card bills, payday traps, and student loans immediately come to mind. But what if we’ve been thinking about debt the wrong way? What if, instead of punishing people for not having money, we used financing as a tool to help everyday Americans build wealth?
That idea already exists. Rich people routinely borrow against their assets, be it real estate, stocks, or private equity holdings. They’ve long understood that access to capital is what fuels ownership.
In fact, the top 10% of households hold more than two-thirds of all U.S. wealth, and a large share of those holdings is tied to appreciating assets like equities and property. Their capital is active. It compounds through leverage and strategic investment. Mortgages, margin loans, and tax-advantaged credit give them ways to amplify their gains.
Meanwhile, for working people, debt is more often a trap than a tool. The most accessible borrowing options are expensive or predatory, like credit cards, payday loans, and buy-now-pay-later plans. Rather than opening a path to wealth, they tighten the financial constraints we already face. About 46% of American households carry credit‑card debt, and revolving consumer debt (which includes credit cards and HELOCs) surged 39% in just three years.
People are taught to fear money, to regard having debt as some toxic trait. That fear narrows the economic imagination. It creates a focus on surviving rather than building. Over time, we become discouraged. We stop looking for a way in, because we’ve been convinced there isn’t one.
“The difference between struggling to save and building real wealth often comes down to one factor: access to capital.”
The difference between struggling to save and building real wealth often comes down to one factor: access to capital. In today’s system, knowing what to do is rarely the problem. Many people understand how markets work and want to invest in their futures—but without the capital to start from, the math simply isn’t there. A $1,000 contribution to a retirement account might earn a $100 return in a good year. For many households, that $1,000 is better spent on groceries, rent, or car repairs.
This isn’t a failure of personal responsibility, but a reflection of how the system is structured. For those who already have capital, the path to growth is nearly paint by numbers. For those starting with nothing, even doing everything right isn’t enough. If access to capital is what enables upward mobility, then the real question becomes, how do we expand that access to people who’ve been systematically excluded?
To reduce wealth inequality, financial tools need to help people build wealth. That means thinking differently about what debt can make possible—not for consumption, but for ownership.
We already do this through homeownership. Mortgages have been the foundation of middle-class wealth for decades. The logic is simple: people borrow to acquire an asset they could not otherwise afford, and they build equity over time. Why should retirement, or any long-term capital building, follow a different logic?
Or the better question is, how do we get money into the hands of people who were never given it to begin with?
Instead of burdening people with risk, we should be building financing tools that are safe, transparent, long-term, and focused on ownership. Working people should have the same kind of access the wealthy already enjoy.
Debt can erode wealth, or it can be used to build it. We already know how to make that distinction. After World War II, the United States ran up enormous public debt that reached about 110% of GDP. The government was not in a rush to pay it down. Instead, the economy grew faster than the debt did. And the debt-to-GDP ratio fell sharply, from 109% in 1946 to around 24% by 1974.
As national income rose, the fiscal burden shrank. That same principle applies here. When people have access to the tools that help them grow, they generate value that compounds over time.
We shouldn’t make people fear debt. We need to make debt work in people’s favor. The right kind of financing can become one of the most powerful tools we have for making ownership real, not just for the wealthy, but for everyone.
SEE ALSO:
• Debt Joins List of Competing Retirement Worries for Gen X, Boomers
