its cute that you people can take a large and complex problem with many angles and reasons and boil it down to a simple catch phrase you heard on talk radio
This is especially silly considering that actual socialist countries don't have consumer credit at all. Do you think Cuba has people in collections? I lived in the People's Republic of China for several years (which is nominally socialist) and everything was based on cash. I paid cash for my cell phone (I was not even asked for my name or ID) and paid cash for the minutes. I would buy token cards for my electric meter, and feed them in to pre-pay for home electricity. The electricity company neither asked, nor cared, who was living in the apartment, and certainly had no need to do a "credit check". I had electricity five minutes after I moved in.
In America, I have been in collections several times. Usually when they send the bills to the wrong address, or I move and forget to shut off the trash service, but the bills still go to the old address. It was always for something that I would have preferred to pre-pay, if that option had been available.