I am in debt. Hundreds of thousands of dollars in debt, to be a touch more specific about it. Four years ago, I took out a home equity loan, signed on the dotted line, and agreed to pay it off over the span of three decades. So far, I’ve been able to make my payments without much trouble, provided I don’t fire off a tweet down the line saying Hitler had some good ideas and thus sabotage my earning potential forever and ever. I am paying down my debt and enjoying my renovated home, just as the system intended.

But the system does not work this way for everyone. Hardly. Just as there is a massive income gap in America today, there is also a massive debt gap. There are people whose lives have been destroyed by student loans and who have been forced to serve out their existences in de facto peonage to those loans. And then you have rich fuckers like Jared Kushner and his father-in-law, taking on millions upon millions in debt (and that’s just the debt we know of) while still sitting pretty (at least for now). I'm in the middle—just a chump who doesn’t understand a single thing about the physics of debt beyond the standard bank loan my wife and I have currently taken out.

The catch is that I’m not REALLY in the middle. The system works for me as intended, but only because I make a nice amount of money. For people of lesser means, the system suffocates them instead of working the way it's supposed to, as it currently is for me. For people with obscene wealth, debt appears to be a cute little toy to play with. A luxury. For the poor, it can be an unbearable burden. So what I wanted to figure out was why this is. Beyond the obvious effects of income disparity, why are millions of Americans getting obliterated by relatively small debts while the rich can over-leverage themselves into infinity, seemingly without consequence if they fail?

To figure this all out, I took a crash course in econ basics from two people, which is two more people than I usually ask about such matters. The first is a close friend of mine, whom I will refer to as Jeremy here. Jeremy works in finance and asked me to keep his real name and his company anonymous so he doesn’t get fired. The second is associate economics professor Damon Jones, of the University of Chicago Harris School of Public Policy. Together, these two gentlemen explained to me why this system is the way it is, and why all debtors are not created equal. But before we can sort out how all this works, we have to go back in time a bit [Wayne’s World KOOKALOO KOOKALOO sound effect] to understand how our current loaning system came to be.

“I think a key question is: Why should society penalize people taking a risk and failing?” Jeremy said to me. Yep, that was what I wanted to know. To show me, Jeremy started to talk feudalism. “This is a very dramatic example, but I think it's useful. There was a time before the United States was formed where, if you were to borrow money from, like, the feudal lords and failed, they had things called debtors’ prisons. If you couldn't pay back the money, by hook or by crook, the feudal lord was going to extract from you one way or another. That had a very chilling effect on people's appetite to take risk. (Old) Europe was a much more hidebound society. There was a culture of being punished for failure. So I think that if you think of it in those terms, it explains how we got to where we are.”