Why northern Europe is so indebted
I don&#x27;t know the particulars of the other OECD countries, but in the Netherlands, the vast majority of household debts are mortgages (as alluded to in the article).<p>The main drivers are probably the tax policy: mortgage interest payments were fully deductible (untill the very slow phasing out reforms after the 2008 financial crisis). This sounds similar as in the US, but in the Netherlands&#x2F;Europe the effect is stronger because marginal tax rates are high (&gt;50%) and the top income tax bracket kicks in much earlier than in the US. It starts around 60k in the Netherlands, so beyond 60k more than half of every extra earned Euro goes to the state. Due to the full deductibility, the common narrative became: if you&#x27;re in the top tax bracket, the state pays more than half your mortgate interest. For most working households, pensions and mortgages are the only substantial tax relieves, which predictably lead to households maxing out their pensions and mortgages.<p>In the Netherlands, zero-downpayment (or even negative-downpayment), interest-only mortgages are&#x2F;were the norm. Before the 2008 crisis, it was very common for respectable financial advisors and banks in the Netherlands to advise households to borrow as much as they can on a 30 year mortgage, never pay down the debt and put everything in the stock market.<p>(Incidentally, my distaste for the bad incentives that come with the tax gimics in high public-spending regimes is one of the reasons than I, a European welfare state citizen, am probably more right leaning, cold-hearted fiscal conservative than the median young progressive American tech-forum dweller.)