ABSTRACT
It is difficult to know who is to blame for the debts going bad. The result, at any rate, is that several sectors households and businesses will be running a larger monetary surplus: they will be seeking to take in more money than they spend, not for the purpose of accumulation but rather for the purpose of paying down debt. Since it is the drive to accumulate that fosters production greed spurs production the result of this situation can easily be a general fall in production. This is, again, a form of debt deflation: the diversion of the monetary surplus into debt service creates a domino effect of falling incomes and reduced production. The ultimate result of this is that lending becomes extractive rather than productive.
