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Originally Posted by Willravel
I'd rather have slow growth because people are financially stable than out of control growth because people are spending money they could never hope to pay back.
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Slow growth? Read economic contraction.
Now, if there is somebody consuming the excess production -- companies building investments, governments borrowing against the future -- then you can continue to pass out "universal debt tokens" (aka, money) to be accumulated by individuals.
But the basic idea, that money can be used to exchange for goods and services later, requires that somebody out there feels obliged to give goods and services for money.
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Originally Posted by InBoil
There will always be someone who tries to live above their means. There will always be someone ready and willing to take advantage of that person. The trick is keeping this exploitation of fools at the right level so that you avoid a collapse in the value of labor, but also avoid an overspending/borrowing related meltdown.
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Living above your means -- going into debt -- can be a smart strategy. Take someone who just graduated from medical school, or is about to go into medical school.
Their future income is a huge asset, while their current assets are either small or negative.
By borrowing against that future income, they can boost their ability to do things right now (be it go to school, or feed their family, or set up a practice) that is, quite simply, more important to them than the consumption they don't get to engage in later.