A recent article in the Wall Street Journal asked if the subprime industry pulls back, will it be harder for the former beneficiaries of its loans “to buy cars, shop at the mall and dine out?” According to the article’s authors, the spending driven by cheap money “has helped to fuel the U.S. economy’s growth.” In correlating consumption with economic growth, the authors simplified the supposed economic stimulus that results from consumption.

What the authors forget is that simple transfers of wealth don’t constitute growth and wealth creation. Money made available for loans is the direct result of the abstinence of someone else; meaning there’s no net growth or spending when it comes to consumption aided by easy lending practices.

The other mistake they make is in viewing consumption from a macro rather than micro standpoint. Shops jammed with buyers might at first glance seem a good thing, but would our economy be better off if as individuals we spent all of our income rather than saving it? That an individual’s economic situation would be made precarious if he or she acted as a prodigal makes plain that consumption is hardly the driver of growth that is assumed by most journalists. If I buy a movie ticket the actor is better off, but I’m $10 poorer.

Since human wants are unlimited, heavy consumption itself is never hard to generate. It can, however, be indicative of economic troubles. Indeed, England was hardly the picture of economic health in the late ’70s, but with capital gains rates of 98% and a currency in freefall, there was no incentive to save. The streets of London were full of Rolls Royces, but the economy was doing very poorly. During the same period in the U.S., so great was consumption that President Carter actually made speeches suggesting Americans should consume less. With taxes high and the dollar progressively weaker, there was very little interest in heeding his words. Last summer, in the rush to beat an August 21 deadline that would devalue the Zimbabwean dollar by 60 percent, according to a Reuters article, citizens there were “scooping up luxury cars, livestock and other items.”

What’s missed when consumption is concentrated on to the exclusion of saving, is that the latter does not mean money is annihilated altogether. Instead, when we abstain from spending and save, the extra capital available gives either additional employment to new kinds of labor, or additional remuneration to workers; both accruing to consumption. As 19th century political economist John Stuart Mill once wrote, “the limit of wealth is never a deficiency of consumers, but of producers and productive power.” Looked at from a micro perspective, while the purchase of an expensive dinner makes the restaurant commensurately wealthier and the consumer less so, the purchase of a mutual fund serves as a form of capital for new innovation all the while enriching the buyer.

Amidst worries among media members and mainstream economists that tighter credit will somehow crash the economy, Americans should be micro in their perspective. If all of us purchased meals, clothing and luxury items while piling on debt to the exclusion of our financial well-being, our own financial situations would deteriorate, as would the health of the U.S. economy. While we produce in order to consume, the ways in which we spend our money are not created equal. It is through access to capital that we enrich ourselves; meaning widespread consumption would materialize in truly tight money that would show up in the form of lower-paying job and underfunded business start-ups, along with lower productivity.

As the Journal article noted, “So far, there are only tentative signs that tighter credit conditions in the subprime mortgage market are spreading to the broader credit market.” Assuming a future contraction in subprime lending, the risk to our economy is not a slowdown in consumer spending by the riskiest borrowers, but a slowdown in credit made available to tomorrow’s entrepreneurs. Capital is wasted when it is lent out for simple consumption, so any market measures that lead to more rational lending will add to, rather than subtract from, economic growth.