Floor-plan financing allows dealers to place cars on their lots while paying 1 percent or 2 percent per month on the cost of the vehicles so they don't buy them outright. Because 90 percent of cars are bought off the lots, dealers need to have plenty of choices to satisfy customers' wants and needs. These steady orders from dealers also help the manufacturers keep their production rates stable.

Without flowing credit, dealers won't have cars to sell, and automakers won't have a sales outlet. It's a vicious cycle. A car is an expenditure for which few can afford to pay cash, but most have enough income to afford payments. Without credit, this all ends.

I've always believed that manufacturing is what makes a country prosperous. But it also needs money, often in the form of credit, to grease the skids of commerce and to keep goods flowing. But improper use of credit, as we're seeing, can wreak havoc on an economy.

If you're in your 50s, you've lived through at least three or four recessions. Every recession that I remember had some problem with excessive credit at its core, along with other contributing factors, such as 9/11 or the meltdown of the dot-com stocks.

Having lived through the Great Depression, my parents didn't borrow money unless it was already in the bank to cover the loan. My dad paid cash for our house in Detroit in 1952 with loans from relatives, paying them back in about six months. He lived with my mother in my grandparents' house to save money to buy his first house, something few couples do today.

He taught me to shun debt. But with home values increasing faster than paychecks, my dad's philosophies changed. He felt a mortgage was acceptable as long as it was well within your means to pay for it, and you should have a year's savings in the bank to pay the mortgage if something happened. Credit card debt was absolutely forbidden, and you wouldn't buy a car unless you had cash.

Today's credit freeze is hurting our world economy, and particularly our domestic automakers. It all stemmed from people and banks abusing credit in the housing area, and now we're paying the price for excess and greed. We need to avoid debt and return to time-tested ways of responsibly handling money--something our government also needs to learn. But I doubt many will make the sacrifice.