Please explain the necessity/benefit of credit

I was reading the paper today, and they were talking about the problems when credit got tight. The example they gave was that stores borrow in the summer to buy inventory to sell at Christmas. And consumers get credit to do their Christmas shopping.

I don’t readily understand why this is a good thing. It seems like a vicious circle - a potential house of cards. I know I hold a minority position, but I don’t understand why it is considered inherently desireable aim that the largest percentage of people possess the largest amount of consumer goods. And that, I believe, is a significant criticism of “the American way of life.”

And government policy is set to allow individuals access to consumer goods - instead of, say, more narrowly increasing access to necessities such as affordable medical care. It seems when necessities and luxuries are both dealt with in the market, many many folk opt to go with luxuries first, and then beg assistance when they cannot cover their basic needs. Sure, each of these terms - luxury, necessity, etc. - must be defined. But it seems to me that we have reached a point at which we believe a considerale level of luxury IS a necessity. And I, for one, am not convinced this is necessarily “a good thing.”

But I believe ever-increasing consumption is considered necessary if our economy is to continue to grow. And how do you weigh whether the benefits from a growing economy outweigh the damage from increasing debt - either by individuals or a country?

Yes, it would be painful if our economy were to slow down. But is it really desireable to pursue a policy that MORE is always needed?

Sorry - this can be closed - I’ll ask this of Scylla in his thread.

Is credit abused in this country by consumers? Absolutely.
Is credit still necessary in America? Again Yes, Absolutely.

While a lot of people borrow and spend beyond their means on unnecessary luxuries or excesses credit is still needed and used by plenty of people living within their means.
Without credit not many people could afford to live in a house, drive a car to work, get a college education, start a business, etc.

Credit and borrowing aren’t the problem. It’s the irresponsible use and abuse of it that is.

Well, keep in mind that not everyone abuses credit cards to buy Christmas stuff. If everyone bought all their goods with cash, the store might still need credit to purchase inventory. And companies often need to use to credit either for start-up, expansion, or sometimes just routine operations. **Hampshire **hit it on the head-- credit isn’t ether good or bad. It can be good when used “right” and it’s bad when it’s used “wrongly”. The $700B question is knowing what is “right” and what is “wrong”.

I reposted my question (and subsequent even stupider ones) in this thread, and asked the mods to close this one.