Similarly, ceasing steroid use will reduce muscle mass.
We can move to a world without credit, but standard of living for people will drop significantly. Look at what happened when they tightened lending standards into a recession in the 1930s.
The key is to find the right balance in regulations to make the system robust
No doubt it would be "inflationary" or some other nonsense, but the reality is that banking is a form of deliberate rationing and enforced political hierarchy.
The financial industry exists solely for its own benefit, at spectacular cost to everyone else - not just by making significant capital almost cripplingly expensive for most of the population, but also by acting in irresponsible self-serving ways which everyone else has to pay for.
It's like wishing that healthcare system wouldn't exist because you imagine a world where people were just healthy instead.
Mortgages used to be boring and conservative, house prices were rational, but financial middlemen didn't make any money on it so it had to stop. It took the Reagan administration installing the Merrill Lynch CEO as head of Treasury to get it done.
The 2008 financial crisis and today's overinflated shitshow of a housing market are the direct result, along with tons of wealth creation for the rentier class.
You can also put your cash into money market funds that invest in T-Bills, which is what anybody with some common sense and a large amount of money should do.
But in this world entities that offer you a return on your money will still exist, e.g. banks. If I can register my cash and you pay me x% per year, that’s better than getting 0. So banks would form regardless.
Banks make loans and create credit which allows the broader economy to grow. Better to have properly regulated private sector entities with skin in the game making lending decisions than having the federal government do it.
If you take a big chunk of credit creation and issuance out of service, the economy is likely to regress fairly significantly.
Clearly the existing bank regulations aren’t sufficient though.