Greenspan: More credit is a good thing

The implementation of credit in American society has stimulated economic growth. Credit cards and installment loans are accessible by almost anyone in the country, Therefore, there should be some mandatory education about how to use credit cards wisely. Greenespan advocated the popular use of credit and credit education as well as the concept that the policy makers should remain flexible, in order to adjust to an ever static world market.

The advance of credit makes it easier for people to buy things. It can also help lower interest rates for some and raise interest rates for others. Credit gives mortgage companies a good indication on how high to set the interest rate for a specific person. Now that credit cards have entered the main stream, the scope of credit becomes more and more of an indication to where a mortgage company should set the interest rate for a particular individual. There is also a chain reaction that helps stimulate the economy. In economy it is called multiplier effect, which means an increase in one person’s income will cause other people’s income increase, so the national income can increase greatly.