It's called debt and most households are swimming in it. Looking at what people wear or if they use an iPhone is a really poor proxy for their financial health.
Debt is just a result of poor education. People literally not realizing what is happening with credit card debt is 100% an education problem. I've had girlfriends who build up credit card debt like they were going for a high score until I tell them what it's doing and how much they could save. They literally don't understand that buying something they want because its on sale at a 20% discount on the credit card is not a discount when you end up paying 20% on that money every single year going forward. They just saved $20 on some purse and because they carry a big running balance on their card, it will be 5 years until they even get close to paying down that purchase. That $100 purchase that was discount to $80 actually costs them around $200 in 5 years, when actually it will be much longer than that for them than 5 years to pay off with the balances they have. I've seen people who make $40/hour being a waiter or waitress after tips at a nice restaurant but they just purely live beyond their means. They often just eat out, every single day for lunch and dinner, not realizing if they look at their charges that they just spent $2K on food this month, and $400 was given straight to Uber just for convenience. Then you also have the people that are just going through hard times and want to survive using debt but I've found again, an education problem, not as simple as simple not understanding interest, but a problem none the less. No budgeting, no planning, no sacrifices. The amount of people that could move each other out of poverty by simply getting a roommate is insane. On another note, there's a hotel nearby, it's not the best but it is the cheapest and the homeless will spend $60/night together to stay there as a group of 4 people, only about $15/day per person more than they make panhandling in a day. They are almost there with their thinking in sharing but again have made a critical mistake. $60 a night is also equal to about $1,800 per month - the same cost it would have been to get maybe a 1 or 2 bedroom apartment. Sure they would have to actually trust the people they live with, but on literally $15 per day, they could have permanent shelter. Of course drugs and everything else complicates that, but in our society it really isn't that bad to simply get food and shelter, but people always live beyond their means and make poor decisions due to poor education.
Our current president has been in the employ of credit card companies for decades. Many others in Congress and in state offices are the same. Do you really think they're going to allow "education" (or anything, really) to cut into their bottom line? This would be like Raytheon allowing us to get into fewer stupid wars. There may be a nation like that, but we don't live in it.
Imagine having tons of debt but enjoying a high standard of living as if you were making more money. so what, if the end result is the same anyway, that being a high standard of living, but one one funded by debt and the other funded by earning more money. It's not like your children will inherit your debt. Debtors prisons do not exist either. I think debt is a problem though if you already have a lot of money, because then you're just being wasteful.
My niece was in that situation -- she always had the latest iPhone, drove a nice (leased) car, went out to nice bars with friends, had nice clothes (but worked in a mall, so at least the clothes were inexpensive).
Turns out she was racking up 10's of thousands of dollars of credit card debt and skimping on necessities -- literally eating Ramen noodles at home and food she scavenged from friends at the mall, she wasn't paying her gas bill and got cut off after she accumulated over $3000 of unpaid bills (in the winter she heated only the bedroom of her apartment with a space heater), etc. It all started falling apart when she got pneumonia and was off work for a few weeks and couldn't pay any of her bills.
She had some of the accoutrements of a high standard of living, but was still very much living in poverty. She's living with her mom now and working on paying down the debt.
https://www.nerdwallet.com/blog/average-credit-card-debt-hou...