Does an economy based on consumer spending have a natural growth limit?

Question

Everyone who has maxed out his or her credit card knows that there is a limit to how much you can spend. And when you reach your credit limit. Then you have no choice but stop increasing your spending.

Perhaps there is no strict credit limit in a consumer based economy such as USA. But the bigger spending debts people accumulate. The more difficult it becomes for people to cope with their debts. And people naturally slow down their spending due to market forces.

Has the US consumer based economy reached its natural credit limit?

And would the US economy have to restructure from being based on consumption to being based on production in order to have more economic growth?

Answer 1

obviously people can't spend what they don't have, and there are limits to credit.  if personal income doesn't keep pace with cost of living increases, as it does not for most Americans, their real disposable income will decline and they can't buy as much.  This is why our economy is in such a bad state - we need more going on that people spending credit money at Wal-Mart.

Answer 2

I think yes there is.

Answer 3

all capitalists economies, not only US, rest on consume spending. In credit crunch situation the spending will reduce; it could be over by recover of confidence and an some government measures. The real danger is on the spending in investment because a reduction in investment means a reduction in the power to produce goods and service to supply the new requirements of consumer spending.

The unique limit to consumer spending is the money we can use for it; the human mind does not have many problems to create new necessities  

Answer 4

There is no consumer spending w/o production.

You can't buy something that does not exist, so the more spending, the more production. Similarly, lower spending means lower production.