Why Debt Is a Double Edged Sword.....learn some basics of how debt works.

The USA being the number one country is dubitable. However, we are number one in debt. But debt is salient to growth. Without credit or debt businesses would not be able to expand. Without expansion there would be less demand for new employees. For a business to continue its operations, it is crucial to utilize debt and secure credit. In regards to entrepreneurs, they would not be able to secure funding, which in turn would prevent job creation. An entrepreneur deprived of a rich uncle is just a Nobody with a good idea. That is why entrepreneurs and startups need credit to continue funding and paying employee wages.

Debt should not be considered immoral, instead vital just like your lungs, which provide oxygen in order to accelerate your bodily functions. Debt works the same way. Instead of using oxygen, the economy breathes credit to accelerate growth. If the banks ceased to create money or issue loans, the entire capitalist economy would forfeit and the financial institutions and their related users, which literally includes every company and consumer would all tumble like dominoes. But credit creation or money creation works in marginally predictable cycles. Chiefly the Federal Reserve fuels the cycle of credit. They are essentially the “gods” of interest rates, which have an inverse relationship with the money supply. If the gods decide to decrease interest rates by buying government securities the debt levels increase. The rise in debt and low interest rates abruptly fuels growth in the economy. The low interest rates provide banks an incentive to lend their money. Banks do not like earning low interest on their excess reserves. So the banks will seek out higher returns by increasing the number loans to businesses and entrepreneurs. When the FED engages in such acts the policy is called quantitative easing. Quantitative easing is what allows companies to take on new projects and investments. New projects and investments will require additional employees.

So, you see, debt is not evil. But it is definitely a double-edged sword. Credit history and scores will reveal those who can or cannot effectively juggle the double-edged sword.

Just to clarify: Money is debt. Debt is money owed. Credit is money lent. Debt and Credit cannot coexist without the other, they are virtually the same thing. Its just that debt takes the perspective of the person receiving the loan, while credit takes the perspective of the person giving the loan.