ML-Implode News - Debt Nation: The Problem, the Solutions

Debt itself isn't a problem, if it's spent and invested wisely. But rising debt-to-GDP ratios mean the debt hasn't led to increases in output, so it cannot be paid down. If debt is not productive, it constrains economic activity, which is one of the reasons the recovery since the Great Recession has been the weakest on record.
Historically, debt levels of this magnitude have never been paid back in real terms. They were reduced through default or inflation, with sometimes devastating results...
After the formation of the limited liability corporation, the abolition of debt slavery, and the standardization of bankruptcy procedures, capitalism advanced, according to Oliver.

"It encouraged risk-taking by entrepreneurs and forced the lenders to assess the value of projects," to make sure borrowers would be able to repay them, he said.

However, this system only works if there is a limit on the amount of debt that banks and other financial actors can push into the system, as under a gold standard. If not, the incentive is for lenders to lend ever more, hoping to get bailed out if a crisis hits.

"Once the creditor class took over and prevented the debt-jubilees from happening, debt got out of control," said Keen.''

Relevant:

Debt Nation: The Problem, the Solutions