Once the debt-to-income ratio reaches its limit, the aforementioned process reverses. At that point, asset prices fall, debtors struggle to repay, investors become cautious out of fear, sell off debt, or refuse to extend debt. This, in turn, leads to liquidity issues, forcing people to cut spending. Since one person's spending is another's income, reduced spending inevitably leads to lower income levels and diminished creditworthiness. Falling asset prices further squeeze banks, while debt repayment amounts continue to rise, leading to even greater spending cuts. Companies lacking credit and cash reduce expenditures, causing stock market crashes, heightened social conflicts, and rising unemployment. The vicious cycle reinforces itself, making it difficult to reverse the economic contraction. Excessive debt burdens must be reduced. During recessions, central banks can lower interest rates and increase liquidity to ease monetary policy and improve the ability and willingness to lend. However, during depressions, since interest rates are already at or near 0% and cannot be lowered further, conventional policy measures can no longer increase liquidity or capital. — Debt: The Big Cycle