Do you suppose it might be possible to have a sufficient number of consumers declare bankruptcy that the entire economy might implode upon itself?

Does history repeat itself? I suspect it does. It may take on a different appearance but its essence often times does come full circle. Let me illustrate with a mini history of credit and money.

Though credit was first used in Assyria, Babylon and Egypt 3000 years ago, an article at Newsweek MSNBC, suggests that early civilizations had far higher interest rates and crueler punishments for failing to repay loans than we have today. It seems that in Athens for example, enslaving debtors was common practice but was eventually seen as impractical as the farming class all fell into debtor's slavery. The outcome was no crops grown resulting in no one having anything left to eat.

The Babylonians' Code of Hammurabi set rates at 33 percent but the Roman Emperor Constantine set a much lower rate at 12.5 percent. Then the Church went on a crusade against usury (meanwhile selling "forgiveness" in the form of plenary indulgences to those with money to pay for it.) Regardless, the Magna Carta placed limits on interest in 1215.

With Christians restricted by usury laws, it fell to the Jews to act as the primary money-lenders in Europe. The resulting stereotype of Jews was immortalized in Shakespeare's play "The Merchant of Venice." Anti-Semitism during this period was rampant: England's Edward I forbade Jews to exact usury. What a shame anti-semitism never ended.

The first advertisement for credit was placed in 1730 by Christopher Thornton, who offered furniture that could be paid off weekly. But In 1752 Britain tried to forbid the New England colonies from issuing bills of credit. Ironically, colonists ended up financing the revolution with the same bills that Britain so despised... along with a flood of hyperinflationary paper money.

But use of a form of credit continued. From the 18th to 20th century "tallymen" sold clothes in return for small weekly payments. They were called "tallymen" because they kept a record or tally of what people had bought.

According to Newsweek MSNBC, "President Andrew Jackson crusaded against the National Bank in the 1820s, seeing it as an elitist vehicle for corruption. After the Civil War, the whole country felt shaky about using paper money as legal tender instead of notes backed by gold or silver. It took 30 years to settle on our current currency. But concerning credit, the Federal Reserve Bank implemented a policy of 'easy credit' in the 1920s that prolonged the boom years but also heightened the crash of 1929.

And in 1950, when the first Diner's Club charge card was issued to 200 friends for use at 14 restaurants in New York, the credit card issuer had no idea that 45 years later, more than 90 percent of all U.S. transactions would be done electronically. He just figured it would be an easy way to avoid embarrassment when he was short of cash.

So in 1950 Diners Club began and was immediately followed by American Express in 1951. The magnetic strip was introduced in 1970 and ushered in the information age and the credit card industry boom which has driven this economy now for decades.

Though we don't have a debtor's prison as in the days of Babylonia, nor is usury lawful (though a good argument might be presented that it is from time to time), we do seem to have come full circle. Remember all those farmers back 3000 years ago who went to prison and could not grow thereby starving there countryman? Well, what do you suppose drives our economy? It's credit. And what horrible condition continues to rise in epedemic proportions as a result? It's bankruptcy.

Per my article Can You Afford It?, the national balance on credit cards, auto, and other non-mortgage loans rose to a new record figure in April 2001 at $1.58 trillion. Delinquent credit card payments (30 days past due) has risen to new high of 5% delinquency. Standard and Poor's reports that the credit card industry wrote off 6.7% of balances as uncollectable which is the highest in years. There is a 17.5% increase in the already staggering number of bankruptcies filed.

The credit card has been the single major pivot in creating a boom in bankruptcies. Do you suppose it might be possible to have enough consumers declare bankruptcy that the entire economy might implode upon itself? It did with the farmers in early civilizations. I would say it is very possible when your castle is built of plastic.