To listen to Episode 1, visit the show page.

The transcript below supplements the United States of Debt, a Slate Academy. To learn more and enroll, visit Slate.com/debt.

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Every day that there’s still a co-signer on those loans, it’s something I think about, like: What if I die? Then they’re screwed.

On paper it looks like you can afford this.

Helaine Olen: The subject of debt makes us crazy. We don’t want it.

Sallie Mae started calling me, like 10 times a day, they were calling relatives.

We’re embarrassed by it.

Oh, boy. Do I have to be completely honest?

We’re sure if we were somehow better people, we wouldn’t have any of it.

I thought I was doing all the right things, and nothing is there.

Welcome to this first episode of the United States of Debt, a Slate Academy. I’m Helaine Olen, the voice of the column the Bills here at Slate, and our guide for this series exploring debt in American life.

In this first episode, we’ll explore how much debt we have here in the States, and how it piled up.

Most of us believe there was a past where we were virtuous, and we didn’t borrow money.

We watched every penny. Like my grandmothers, we reused tea bags.

We’re sort of correct. That is how a lot of people lived—after the Great Depression.

[From the film version of The Grapes of Wrath, 1940]

Mae: This here’s a 15-cent loaf

Pa: Well could you see your way to cutting off 10 cents worth?

Bert: Give him the loaf

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Franklin Delano Roosevelt: This nation is asking for action and action now. Our greatest primary task is to put people to work.

But this virtue was necessity. No one was lending our grandparents money, not the way they lend us money.

There were no credit cards. There weren’t even ATMs.

If you needed to buy groceries, you went to the bank and withdrew cash.

If you fell in love with a dress at the store, and you didn’t have money on you, forget about it! The best you could do was put it away on layaway. When it was all paid off, they let you take it home.

Housing was also different, and easier. You saved up 20 percent of the purchase price. You then went to the bank, they interviewed you, they checked your financials. If you passed inspection, you got a mortgage. If not, nothing.

Potter: And we’re building him a house worth $5,000. Why?

George: Well, I handled that Mr. Potter. You have all the papers there—his salary, insurance—I can personally vouch for his character.

Potter: Very good. You see if you shoot pool with some employee here, you can come and borrow money.

That’s, of course, from the classic movie, It’s a Wonderful Life.

And of course, it was a simple, easy to understand, 30-year fixed-rate mortgage.

And if you wanted a home equity loan—that is, the money you borrow that’s guaranteed by the home itself—they were known as second mortgages. They were embarrassing. No one admitted to this in polite company.

And finally, many states limited the interest rates that could be charged on loans. That stopped people from getting into too much trouble.

Alright, let’s pause for a second. It wasn’t perfect. A married woman had no right to her own credit ’til the mid 1970s. If you were a member of a racial minority, or you lived in the wrong neighborhood, it was almost impossible to get a mortgage, thanks to something called redlining. But the system did, for all its faults, have one big advantage: It was a lot harder to borrow enough money to get into that much trouble.

Then, slowly, things changed.

American Express commercial: American Express. It’s the only credit card you really need for travel and entertainment.

Discover commercial: Free FICO score and credit scores to our card members. Apply today at Discover.com.

In the 1960s it changed from a simple charge card that people paid off at the end of the month to something you could carry a revolving balance on.

Then student loans came in. And they got a huge boost under President Johnson, who made education a priority.

And then, beginning in the 1980s, people were encouraged to look at their homes not just as a simple savings vehicle—they were a cash register, and a quicky one at that.

Phil Rizzuto, the famed Yankee, went on as a second career after he retired as a shill for the mortgage industry. And was frequently seen on late-night TV telling people to remove money from their homes.

Phil Rizzuto: Qualified homeowners can borrow up to $100,000 and more for any reason at all.

Money Store customer: We get our money back guaranteed?

Rizzuto: Return the money within two weeks of closing and the deal is off.

Real estate home hucksters like Robert Kiyosaki, Carleton Sheets, and Robert G. Allen insisted that real estate investing could be the key to financial independence.

Robert G. Allen: Look at the market place! There are more fortunes to be made during these few months than I have ever seen in my lifetime. And I’ve been teaching this for 35 years.

Carleton Sheets: I never thought about becoming a millionaire. But I learned one thing very quickly. If you do the right things over and over again, good things happen. And of course, real-estate investing.

Robert Kiyosaki: We have cash flow, checks every month. Money flowing in right? Income every month. Which means you can soon quit your job if you want to.

And why did people listen to this? Sometimes they were greedy, sometimes they were desperate. Either way, they were earning less than they once were, but their expenses weren’t going down, they were going up.

Elizabeth Warren: What these data show is that today’s family with children is going broke over the basics.

Elizabeth Warren, before she became a Massachusetts senator, was known for her research on families, incomes, and bankruptcy. Here she is at the Massachusetts School of Law in 2004.

Warren: The underlying reality is that today’s two-income family is having to spend so much more just for the core, just for the basics, just for the mortgage and the health insurance and the car and the preschool than parents had to spend a generation ago and that’s what it is that’s driving them into bankruptcy. So in other words, at once you can say, yes, we’ve always understood that having children is expensive, but what’s happened in a single generation is the cost of having children has shot way out of reach of the average median earner.

Warren’s research showed, in 1973, families were only using half of their take-home pay for housing, health care, and education. Three decades later? That number was 75 percent.

And get this. The 1973 household had only one working adult. Thirty years later, there were almost certainly two. And for many that still wasn’t enough money.

So we borrowed it. Robert Lawless is a professor and an expert on debt at the University of Illinois’ law school.

Robert Lawless: The increase in consumer credit is part of a larger story about the erosion of public involvement and public support for the necessities and the things that we think people should be able to have.

But as we all know, here in the United States, most of us believe we owe too much money. That might be because the amount we owed doubled between 2000 and 2007.

Then it, and we, crashed.

Newscaster 1: A lot of their customers are freaked out, waiting to see how low the Dow will go.

Newscaster 2: They know about gas prices and food prices, do they know about the banking troubles?

Newscaster 3: Many of them expressing sadness, shock, also frustration.

Newscaster 4: Rethinking of how the American financial system functions. This is a day that will be remembered forever, Sept. 14, 2008.

The stock market’s come back since then, and we owe less money. But we still owe plenty of it.

Today, the typical household owes about $130,000. Much of that’s for mortgages, but it’s also credit cards and auto loans, student loans, payday loans, and pretty much anyone who will lend money.

No wonder people worry that they’ll live with debt forever.

There’s something important I need to stress here. While we’re dividing our upcoming episodes into four subjects—credit cards, medical debt, student loan debt, and housing debt—these aren’t four fully separate subjects.

Many of us have more than one kind of debt. As you’ll hear from many of the people we speak with in the upcoming episodes, almost all of them have a mix—but it’s not because they’re irresponsible, lazy, or dumb.

Leigh: Debt seems to be like a domino effect, and one thing leads to another. Some of it is credit card, student loans—all sorts of things. I had to borrow $8,000 against my 401(k) to pay the bills. My daughter just graduated college last year, so, it wasn’t how we planned it. No. We’ll put it that way.

That’s Leigh. What he didn’t tell you? His financial troubles began when he had a heart attack in his early 40s. His finances, and his heart, have never been the same.

If people run into financial trouble—for ANY reason—it spills over into other areas of their lives.

Carmen Rita Wong: For a lot of folks very simple things happen that can set you back very badly. Let’s say you don’t have an emergency fund, and let’s say you lose work, or someone cuts your hours. Or a child gets sick and you have to basically fill up your deductible on your medical coverage.

That’s Carmen Rita Wong, a debt expert who has covered personal finance for CNBC.

Wong: You know, $3,000, $6,000 a year, that’s huge money for a lot of people. And it’s really hard to dig out of that. So then they’re paying monthly into this credit card bill, and then that ability to save disappears.

But all too often we don’t believe it. We think there’s something they could have, should have done to prevent it, or make it stop. Here’s professor Bob Lawless again:

Lawless: We’re hard-wired psychologically to see people—and see where people are as a result of who that person is rather than their circumstances. So we see someone who’s borrowed and say, “That person’s irresponsible.” We don’t say, “This person’s lost their job, and she has three kids, and needs to put clothes on their back and food on the table.”

No one is perfect. Yes, many of us spend more on vacations and eating out and other luxuries than we should. But it’s rarely the source of our financial woes, or certainly not the full source of them. As I always say, you see people buying a latte, you don’t see them buying their Lipitor.

But most people don’t get that. Here’s CNBC’s Rick Santelli.

Rick Santelli: This is America! How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills? Raise their hands.

He went on an epic, famed rant on air in 2009. The one that started the Tea Party.

Santelli: President Obama, are you listening?

And then there’s Bible Belt personal finance guru Dave Ramsey.

Dave Ramsey: And don’t talk to me about going on vacation. You’re broke! Broke people don’t go on vacation!

He’s begged people to shun bankruptcy and pay down their bills despite the fact—get this one folks—he’s declared bankruptcy himself, way back in the 1980s.

But now he gets on the radio five days a week to tell people to pay down their bills and not declare bankruptcy.

Ramsey: When it comes up inside of you, it changes your life. And then you have to have a clear path to run on, and that starts with the budget, and the excess you squeeze out of the budget from increasing your income and decreasing your outgo, by cutting back on things like not seeing the inside of a restaurant unless you own it or you work there. You lay out the game plan and you get in attack mode. Beans and rice, rice and beans.

And then there’s America’s money superstar Suze Orman.

Suze Orman: You absolutely know why you choose to get manicures all the time, why you choose to buy a snowboard when you are behind payments on your student loan.

Her tough talk got her branded “the queen of the crisis” by Time magazine. Here she is dishing it out to folks on Oprah:

Orman: You are lying to yourself. You are lying so that you can have a justification as to why you bought a $1,400 bed. Why you drive a car. I have gone through every single penny that you spent. These are the most horrible FICO scores I have ever seen. Every time you decide to pay your rent versus your student loan, a bed versus your student loan, eating out versus your student loan. What you are doing to yourself is really committing financial suicide.

If you take this sort of stuff seriously, know that four years later, Orman appeared in a commercial for a $40,000 Acura TL.

Orman: That’s not a dress, that’s an emotional money mistake. Listen, I don’t have anything against luxury, I like luxury. But you have to be reasonable. OK, spend smart!

Acura TL voice over: This holiday, listen to the voice of reason …

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Joseph Cohen: America is a place where the luxuries are cheap, and the necessities are expensive.

That’s Joseph Cohen, a professor of sociology at Queens College at the City University of New York.

Cohen: That’s a quote from an audience member at a presentation that I gave years ago. It was in response to some research that I did that looked at where Americans had been spending their money.

He thinks we obsess about small self-indulgent spending while ignoring the big picture.

Cohen: We think of those small treats that we give ourselves and we think well, I really didn’t need that and I could have saved $5 here and $5 there. But the truth is that all those small treats are small when it comes to their dollar impact on the budget. The real drivers of household spending, there’s three big areas: education, health care, and housing.

But, of course, you’ll see this all play out over the next four episodes, where we meet a variety of people who’ve had to deal with burden of debt.

She had her debt, I had mine, things were getting tight. And as you know, when finances are tight, then it’s not a very happy house.

You know, maybe $50 over here and then $50 over there. And then, little do you know, it’s, like, gone.

Debt is not a problem when things are good. But debt is a horrible thing to have when things are bad.

Thank you for listening to this episode of the United States of Debt, a Slate Academy. Jennifer Lai is our producer. In this episode you heard music from Kai Engel and Chris Zabriskie. Thanks so much for listening. I’m Helaine Olen, and I hope you’ll join us next time. And remember, to sign up and hear more stories of debt in America, visit Slate.com/debt.