According to this theory, savings-induced growth is sustainable while credit-induced growth is not sustainable. Intuitively it makes sense that you'd eventually have to make up for overspending in the present by underspending in the future. If I want to buy something worth $10,000, I can either borrow that money & buy it now or save my income & buy it later. Either way I'm spending $10,000 so it doesn't seem like borrowed money really contributes to economic growth. It seems to me that buying now & paying later just steals demand from the future.
Part of me suspects that I may have oversimplified things so before I accept the Austrian theory as the irrefutable truth can someone explain to me why they believe credit-induced growth is unsustainable?
If I'm going to build an entire belief system around this a priori reasoning I need to make sure it's bulletproof to criticism.
Sounds good. What is future consumption but savings and what is credit based on but savings!