The credit of the people is the primary force that creates prosperous nations. Why?

In response to a posted comment requesting more detail on what is "aggregate demand", as explained in another post, it is important to understand how the credit of the people is used to increase the prosperity of a nation and why their exercising a natural right to borrow money will increase the prosperity of all people in every nation. In countries where a powerful centralized government is used to tax the people and spend money the people receive little or no direct benefit or government assistance toward their efforts to improve their personal net worth. This process is known as socialism and follows the theories of an economist Maynard Keynes who had no knowledge of how economies become prosperous.  The government may employ more ans more people and the country may gain the use of better bridges, highways, transportation systems and increase the welfare payments to the people but the expenditure of funds in this manner does not increase the demand for consumer products by the people which is what creates jobs, drives an economy and creates prosperous people.

When people purchase food the demand for goods creates jobs. The food is necessary for sustaining life obviously but it does not increase the personal net worth of the people except to the extend money is saved from the earnings derived from those working to provide the food. The same thing holds true when consumer products such as clothing, automobiles, or toys are purchased. The demand for such goods creates jobs and energizes the economy. Because of their limited use the value of the products drop immediately upon purchase and continue to decline until they are of no longer any benefit or sold. The people can own a large number of such items but it does not increase the net worth of the people over time.

However when the people purchase an asset which is personal property, such as a building, home or parcel of land that has the potential overtime to increase in value they are increasing their net worth. Purchasing an appreciating asset is the economic principle that creates prosperous people when they are free and possess protected rights to own private property. This is the result of following the sound economic principles taught by Friedrich A. Hayek. They become investors in their own economy by borrowing if necessary some portion of the purchase price and use future income to pay off the loan on an asset that is actually increasing in value as the debt is reduced. Increasing the net worth of the people in this manner increases the prosperity of any totally free nation as the value of what the people have created and own grows. The degree to which this process increases employment as aggregate demand for new products increases is explained in another post on creating a prosperous nation.