Well, maybe the US is a special snowflake wrt to mortgages and that was a bad example. Most of the world doesn't have the luxury of fixing their mortgage debt

Well, maybe the US is a special snowflake wrt to mortgages and that was a bad example. Most of the world doesn't have the luxury of fixing their mortgage debt for 30 years or have a Fannie and Freddie to support them. Plain old businesses also have to tighten their belts and pay down their debts as well though. My broader point is it's all a zero sum game. Almost all the money in existence exists because someone wrote a loan. The existence of debt or the lack of deposits is not inherently a problem. illiquidity isn't a problem if nobody wants to move their money, and interest rates rising isn't a problem if it's accompanied by inflation which will drive up asset values and wages (which support lending)