Debt deflation

Debt deflation is a situation where too much debt (money people owe) leads to very low economic growth. This can happen when people have borrowed a lot of money and are not able to pay it back. When this happens, people have less money to spend, so businesses start to make less money. This can cause businesses to lay off workers, and wages go down, leading to less spending. When people don't have as much money to spend, the prices of things go down, making it harder for businesses to make money. This means less economic growth, and more people unable to pay their debts, leading to a cycle of debt deflation.