Response to OP title of thread -
I am of the opinion that debt is bad, generally speaking. In essence you are paying a premium (in interest) for something that you cannot afford to buy outright. The financial analysis of this is that you end up paying more for the same item when compared to a cash purchase. So considering that your income is finite over your life (you just don't know how much it is right now), you end up with less cash flow and lower purchasing power over time. The trade off is you have the item for use now.
This leads to a discussion about opportunity cost. If you purchase something, that means you lost out on buying something else. If you don't purchase something, you lost out on the use of the item. Thus, there is always a cost involved with whatever decision you make.
When you consider both points above I reach the conclusion that debt is only a good thing when purchasing an item that goes up in value. One must overcome the opportunity cost, the interest expense, and the risk factor in order to come out ahead financially (among other factors). A home located in a good neighborhood is a prime example of good debt, while just about any automobile or credit card expense are examples of bad debt.
The first item (a home) tends to go up in value and will likely double in value in about 15 to 20 years, so considering that you will pay twice the purchase price over a 30 year loan when factoring interest, the home loan begins to make financial sense in many (not all) situations. A $300k home may cost you about $600k over 30 years, but will probably end up being worth $750k at the end of a 30 year mortgage. So paying $600k for a $750K asset is more than worth it. Even if the home is only worth $600k at the end of the mortgage, you still came out ahead because you didn't have to pay rent for 30 years, and instead owned a viable asset at the end of it. In other words, your rent payment becomes equity for you instead of equity for your landlord.
The last items (like a car) are a massive financial hit for anyone. A brand new $35,000 car will only be worth $5k to $10k at end of a 5 year loan. So not only will you pay more than the purchase price over 5 years when factoring in interest, you will have lost 75% or more of the value of the car over that time. (and don't forget that the $600 a month payment has an opportunity cost associated with it). So when financing a vehicle, one could easily pay $40,000 for a $10,000 asset 5 years down the road. Sheer financial stupidity, yet the vast majority of Americans are guilty of this poor financial behavior.
Disclaimer - I am painting with very broad strokes with my numbers. I am not in any way suggesting that these numbers are abject facts in all situations.
Personally I only have 1 credit card that I exclusively use for utilities and monthly on line payments like health insurance. This bill get paid in full at the end of the month. I never do anything other than pay cash for a used car, and I always use my debit card to buy everything thing else I need (comes right out of my bank account). I also maintain a cash reserve. In other words - if I can't afford something, I don't buy it.
My only long term debt is my home, which has gone up in value every year that I have owned it according to the county assessor, and this debt will be retired in 15 years instead of 30 if I am able to stay on schedule. The ratios for this purchase will end up being around 1.5 times initial value paid for the asset, and 2 times (or more) initial value of worth in the open market at 15 years, meaning I will have made money on the debt purchase.
I have lived this way for over 10 years, and have gone from a negative net worth before I implemented these policies to a net worth of almost $175,000 today.