Credit: A very vicious circle

Using credit boosts the economy because it leads to additional spending. But using credit also creates debt, and paying off debt reduces spending.

If we start off with only a little debt, the use of credit creates a good boost to spending, and debt service only reduces spending a little.

But credit-use creates debt, so our little debt gradually becomes big. And debt service on a big debt reduces spending a lot. When that happens, to get a boost by the use of credit, our use of credit must be large and growing. But using credit creates debt ...