Does credit really help an economy?
Credit or more broadly finance helps to allocate scarce resources to where they are most needed.


  Example. Suppose party A is sitting on a pile of resources from which he thinks he can make a return of 1% (per annum). Party B has no resources, but thinks she can use party A's resources to make a return of 3%. Then both parties can benefit if A loans his resources to B at a rate of 2%. (Society also benefits, at least insofar as the economic pie is larger than it would otherwise have been.)


(Of course, in the real world, A and B may be very much mistaken about their rates of return, which is partly how bad things like financial crises arise. But the above simplistic example illustrates what's "supposed" to happen, at least in a world of perfect information.)



P.S. Your presumption that "productivity will always grow at around 2%" is false. Finance/credit is at least part of the reason for non-trivial economic growth in the past 250 years. In a world where entrepreneurs are unable to gain credit, economic growth would be lower.