Credit cards - where did it all go wrong?

For some time, it has been becoming evident that since the advent of freely available credit, the pendulum has been gradually swinging over to the point where we are basically spending more than we earn. This is illustrated by a number of TV programs that deal with personal debt (Pioneered by Alvin Hall a number of years ago). Naturally, the TV programs dealt with the worse case scenarios but the dangers of spending more than you earn applies to everyone and is a trap that anyone can fall into.
Credit cards have enabled us to spend money that we don't have and put off paying for these purchases almost indefinitely whilst building up massive interest costs without even noticing. In the short term this can provide a massive boost to the economy, but only by 'borrowing' future expenditure.

Let's take a 'micro- economic' example to illustrate what happens on a much larger scale:
You want a new HDTV which will cost $5000, you have $200 in your bank account and a credit card in your pocket. In the days before credit cards, you would have needed to arrange an overdraft or loan with your bank. You don't really want to have to justify purchasing the latest TV to your bank manager so you see sense and start saving up for it....
In the days of freely available credit, you just take the plastic card out of your pocket and the new TV is yours... The money that pays for the TV will be be earned over the next year or so, you have 'borrowed' future earnings to pay for a current purchase. However, having this easy means of credit can cause you to spend the next twenty years 'pocket money' in a year and then want to do exactly the same thing again - this is the trap, and we have no-one to blame but ourselves. In macro-economic terms, the knock-on effect of you spending your future income now generates short-term wealth all around you - the salesman gets his bonus, the retailer makes profit and spends elsewhere generating a knock-on effect time and time again (For those who have studied economics, this is the 'multiplier' effect and is a major contributor to our Western economy) - some of this knock-on effect could even end up back in your own pocket...
If you can't already see where this apparently ideal solution to not saving up for stuff is flawed, then let me spell it out: You can only spend your future income when you curb your future spending to account for it.

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