Originally Posted by kane

To answer the main question I would say that we are not yet a credit/service based economy, although I think we are more and more becoming a credit based economy and if we are not careful we could become a credit/service based economy.

Here are some thoughts on us being a credit based economy. I read the other day that the average wage in the US is around $16 per hour. The average house cost around 180K (that number was pre housing market collapse.) Obviously both of these can vary greatly depending on where in the country you live, but this was the national average. At that rate the average wage earner cannot afford the average house. So they can buy a cheaper house (if they can find one) or rent. But if that is the average house cost, rent won't be that much cheaper than buying. So they use up more and more of the income on housing. In doing this it frees up less income for other things so people are using credit more and more to get those things. Also with the cost of some things growing faster than incomes the only way to get them for most is credit. Without credit most people wouldn't be able to purchase a new car. Many people would not be able to take a nice vacation or buy some decent furniture for their house. Since our economy is reliant on consumer spending for its well being it relies on credit to help people spend money. This can open an entire new conversation about responsible spending VS excess spending and living withing your means, but that is another discussion.

Can a society that is mostly credit/service based survive and thrive? I would say no. If you go to just about any third world shithole of a country most of them have a few things in common. 1. they have some kind of a corrupt or over powerful government and 2. they don't produce anything that they sell to other countries. So instead of manufacturing or creating things that they sell to other places they just sell stuff to each other so there is no infuse of extra money into the system, they just pass the same money back and forth for different things and the overall wealth of the country doesn't grow.

Just my thought.