Mark Greengrass (Christendom Destroyed) observes that nearly everyone in sixteenth- and seventeenth-century Europe was in debt at one time or another during their lifetimes: “In Rome, for example, about 6 percent of the population found themselves imprisoned for debt in 1582 alone.” Court records provide further evidence: “Debt litigation dominated law cases in London in the century after 1550” (112).
And it wasn’t just commoners, merchants, or lower nobility who incurred debt. On the contrary, “the higher up you were socially, the more in debt you were likely to be. In Elizabethan England, the duke of Norfolk, the earls of Shrewsbury and Essex, and other aristocrats regularly pledged their plate, jewels and occasional revenues to sustain their lifestyles. In 1642, the income of England’s peers has been estimated as about 730,000 [pounds] – but their debts were double that figure. The palaces of Europe’s grandees were as much a tribute to their capacity for debt management as they were an acknowledgement of the importance of conspicuous consumption in upholding their social status. And they were led by Europe’s princes, more indebted by far than their predecessors” (113). Philip II declared bankruptcy three times, and some European monarchs stayed afloat only because of the treasure coming in from the New World.
(In a depressing aside, Greengrass notes that one of the reasons American silver and gold didn’t have as much of an impact on the European economy as we’d expect is because much of the treasure was expended on war. American metals bankrolled the self-destruction of Europe.)