Great observation about credit & the economy. And great questions, too. I don't have answers, but hope some qualified economist will answer them.

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Ponzi scheme indeed. Read a blog by my friend Lisa Kearn on here who was late on one payment due to the admitted fault of the credit card company, but they moved her interest rate to the default rate of 27.99 %!!!!! And even though they admitted their fault, they still wouldn't reduce the rate. Her piece, "Breaking Up with My Bank" is a perfect example of the scamming that's been allowed via all the DE-regulation of the fuckwads in the Bush Administration and the Republican't Party.
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I'll tell you where we went wrong. It was when we started thinking we need everything they beg us to buy and then applied for every credit card.

Our parents didn't do that. They were firm believers of living within your means. Just because Joe Blow has a plasma TV doesn't mean you have to run out and buy one. Our parents saved till they had the money to buy whatever and don't be so damn greedy!

After all, it's just material stuff....

I personally don't use a one except AmEX and pay it off immediately. It's the best thing I ever did when I cut up all of the credit cards. If I don't have the money for it, I don't need it!

Oh, yeah....I remember those days! It meant if you didn't have the cash, you didn't buy it....makes too much sense I suppose. I agree with Pam....we need to get back to living within and if possible, below our means. Great post Trevor and rated!

You are very old fashioned, have been raised with a solid work ethic, know the value of old money, great head on your shoulders and have questions that deserve to be answered honestly, straight forward and with sensibility. I am afraid you would be very disappointed, as we all are. The growth of technology, the boon of super electronics, cell phones, built in obsolescence in everything we must have to survive in today's fast paced culture, is, I believe, the root of our down fall. Every industry and every household has come to depend upon and need all these "things" to operate, communicate, compete for jobs, socialize with, keep ourselves entertained and our children and so on and so on. Who now can grow their own vegetable garden? Who among us knows our neighbors by their first names? Who now can survive without flat screen TV's, the latest IPhone and MacBook, video games (the ultimate adolescent rip off of being held prisoner to an indoor, mind dazed, brain freezing pass time).....not a fan, can ya tell?!?
"Who convinced us this was the right way to go??? I beleive it started with the Japanese (electronics, automotive, high tech expertise? Think about all the brands we are using and where everything is manufactured...then the Chinese...Outsourcing, loss of American engenuity, manufacturing and pride...and now India.
Can't stomach the many, many more answers that come to mind.
"You" can be part of the solution. We need a new generation to help put us back together again. Bring back what once was...the American Dream. Sorry if this bummed you out.
Your post was so simply put and so highly charged. Rated.