A useful thought experiment is to consider why things might exist in the first place. Credit serves lots of useful functions in the economy, and has done since

A useful thought experiment is to consider why things might exist in the first place. Credit serves lots of useful functions in the economy, and has done since ancient times[1]. Consider someone (say a farmer) who needs to make investments (seed, fertilizer, equipment etc) that will pay off in the future (when the crop is harvested and sold). It would be very much harder for them to run their business if they could not borrow, or forward sell their produce (which is an agreement that requires credit as a basis). Or consider a merchant who needs to import or export goods. While the ship is at sea, either the buyer or seller almost certainly requires credit. Think about very large assets (eg houses). Most people who buy property require a loan. To buy a house for cash where I live would require a literal lifetime of saving - where would you live in the meantime? You would need to rent. How would your landlord be able to buy a property if they could not borrow? If you did eliminate borrowing to purchase property literally only the ultra-rich would own property and they would own all the property. This would enforce an extreme unfairness that would be self-perpetuating as it would be practically impossible to transition from the renting to the owning class. This is similar to Europe in the early medieval period when hereditary landed gentry owned all the property and as a result the vast majority of people lived lives of abject poverty. In general if credit did not exist, economic activity as a whole would be severely curtailed. Do people use or extend credit unwisely? of course they do. Should it be done away with? Probably not, or not without understanding the profound implications this would have across the economy. [1] https://erenow.net/ancient/money-in-classical-antiquity/6.php https://erenow.net/ancient/money-in-classical-antiquity/6.ph...