A Credit Free Economy - Living Only On Cash

What changes would occur in your way of life if you were forced to live in a cash economy? We live on credit. Many middle-class families simply cannot afford to live without credit. Even in the olden days there was credit. Bars had "tabs"... general stores had "accounts." People paid their tab at the end of the week when they got their paycheck. No interest. Just good faith. When was the last time a cash only economy existed? Was it back when there simply was no currency that functioned only as currency? That is, when there were no coins or bills, just items people bartered for other items or services. Could we live in a cash only (with bartering) or no credit economy?

Let's look at a few of the things we use credit for. The most obvious thing is credit card use. People use credit cards for just about everything they can think of. Then there are loans: car loans, mortgages, personal loans, business loans, student loans, lines of credit, etc. etc. We use credit for everything under the sun. Major corporations and the U.S. government depend on credit.

Here's a quick look at a few of the things that would change if credit was simply not available. Either the prices on some of the world most expensive items (cars and houses) would drop drastically so people could afford them or people would simply not own cars or houses unless they were incredibly wealthy. In fact, becoming wealthy would probably be much more difficult. Almost all start-ups, require some form of investment capital... i.e. credit. Perhaps the distribution of wealth would be much more equal.

College educations would either be very exclusive or very limited. Once again, prices would drop to be affordable or would be only for the very wealthy. Governments would be completely dependent on what taxes they could raise. Which, in some cases might put a heavier burden on the taxpayers, making it even more difficult to pay for the necessities of life.

These are only a few of the things that might happen if we were to be forced to live in a cash only economy. This short article simply could not cover all the implications of a credit free economy. What do you think? What else might happen if we were forced to live in a cash only economy?