That does have a resemblance to what happens during a recession, but I'll point out that clearing houses mitigate that specific problem with debt cycles. For a

That does have a resemblance to what happens during a recession, but I'll point out that clearing houses mitigate that specific problem with debt cycles. For a more realistic analogy than the one you mentioned, I'd check out Krugman's article about a recession in a babysitting co-op: https://slate.com/business/1998/08/baby-sitting-the-economy.html https://slate.com/business/1998/08/baby-sitting-the-economy.... . It seems to be exactly what the GP was looking for