Is the large scale use of high interest credit cards to encourage consumer spending healthy for the economy?

Question

The rich companies are content to lock people into a cycle that is difficult to escape, racking up too much debt that they can't pay off, and shelling out a large portion of their income on interest payments. Don't get me started about criminal late payment fees.
This is good for the finance sector, but is it good for the economy as a whole? When consumers actually buy less because they have less money left over, then we are actually selling fewer consumer goods, aren't we? Is it really good to have a few powerful people in control of the money while the lower class sinks into economic turmoil?

When answering me, try to think of my reasoning not as that of a "communist", but in the same sense as Japan, for example, where they seem to think that it's good for everyone to be fairly financially sound so that everyone can participate in the economy and there aren't a lot of poor people dragging the economy as a down....

OK romulus, that was the first, most obvious answer. But I think the point I'm trying to get at is, will there be a point when too much of the money has filtered up to the top, and the bottom is left in such a shambles that there is really no profit left to be made even with credit cards?
I am one of those who worked really hard to pay mine off, but there are plenty that never will. Personally, I think that the credit card companies should take those losses since they push the debt, but they don't. So they are further rewarded. But how long can the GDP afford to pay for that?

Answer 1

WoW this is a good question. This is why the south opposed central banking back in cival war times.

My answer is:
Not in any way.

When consumer income is tied up in interest payments they cant spend that money on other goods. Every business that markets to the public is hurt by lowerd consumer spending. Your asking a rhetorical question I think.

This has the same effect as higher taxes. When taxes are higher we are trusting in the government to spend our money better than we would; leaving less money in the hands of consumers When interest rates are high on revolving debt we are assuming banks will invest in the country's future more than we will; leaving less money in the hands of consumers. Both are very weak arguments.

The problem comes now... how do you fix it.

Outlaw credit cards? Legislate against free market? Let the credit cards rape and pillage our economy? You start getting into some grey areas.

Answer 2

It's healthy for the economy of credit card companies and banks, which helps credit and bank executives reap huge concessions and severances. And as any good republican knows, making the rich richer is good for GDP which equals good for the economy.

Answer 3

This question is worth more attention

Answer 4

Good question