It's bigger than that.
Our economy is not merely stimulated by people buying on credit. It is built upon companies being able to take credit to invest in future developments. As such I don't think an economy where there would be only Bitcoin would flourish.
For as much flak as fiat gets, it did enable economic growth in a previously unprecedented way. As such I think we won't be able to operate without it all that easily, unless we find an economic model that does not rely on wealth generation by borrowing money from the future.
It enabled it because it gave people fake money on credit. If you have a company, need 10000 USD to buy equipment and want to borrow from your family members but all they have is 1000 USD, you struggle. Your company doesn't grow, you don't make money.But when suddenly you're able to write a check with 10000 on it and get what you need it all starts to work well.
Is it ok when the money is fake? You are happy because your company grows, the seller of the equipment gets paid, he's happy, but somewhere at the end of the line is a person who doesn't get paid. Who wants to cash in the check but the money isn't there. The fiat system works well as long as only a few people want to cash in their checks. There's not enough money for all of them.
Not quite.
The part where "there's not enough money for all of them" is what you get if you'd apply a credit based system to a fixed, constant money supply. Both the boon and bane of fiat currencies is that the supply is potentially endless, so there will always be money available. Increasing the money supply works well enough if it correlates with economic growth (ie. credit is being used to create wealth by producing and providing useful goods and services). It utterly fails whenever the economy doesn't reflect the available money supply (ie. credit is wasted on empty housing, failing startups, dictators with lavish lifestyles etc).
That is, generally speaking. Obviously the problem you are describing does exist, it just has a slightly different cause. It's what you get when fractional banking goes wrong, that is, when people start over-leveraging their assets, risks are wrongfully assessed and credit by consequence becomes more plentiful than healthy. As with everything, it is the dose that makes the poison. A sane credit system does work and makes sure that the money borrowed will later on be reflected in the wealth created. Unfortunately that is not always the case, eg. when reckless crediting becomes incentivized and accountability becomes close to nil. Risking other people's money is easier than risking your own. Even moreso if you get a bonus when something goes wrong and merely a slap on the wrist when disaster strikes.
Note, however, that fractional banking does not only affect fiat currencies. We've seen the same thing happen in crypto, most famously with MtGox. And here we arrive at what in my opinion is one of the most important features of Bitcoin: Being able to autonomously store and transact money, without being dependent on any third parties. Bitcoin being deflationary is, in my opinion, more or less incidental, even though it was necessary to move digital assets into the spotlight. Self-reliance and independence is what makes crypto important in my book.
Lending in fiat requires some form of security by including third party like guarantors but how will that also be possible with bitcoin where bitcoin even don't adopt third party agreement. 
