Liquidating assets to pay debt is deflation, proper. It is important to understand, in the face of “the big risk” 99% of us never really own property. It is rented.
The “new normal” is a retrenchment. We are going back to a system of extended rents.
Feudal lords paid tribute to the king extended from rents collected from occupation of the land. Peasants paid tribute to the lords for the opportunity to work the land. This is not unlike the government (the king) rebating taxes to employers (the lords) who collect it from their employees (the peasants) on command, which is a common practice in the US.
Just like the feudal system of extended rents, the employees are renting their jobs from the lords–the “job creators”–but on demand. (People do not have to work jobs created for them. Nobody forces anybody to work. It’s an on-demand existence.) Remember that after The Revolution “We the People” are now the government. That means we rent the space we occupy on demand, paying tribute to the lords who now occupy the identity of the king by natural right.
“We” are now landless peasants, dependent on the capital–the “job creators.” According to capitalists, this is an improvement, capitalizing on the subordinated identity, yielding to the “natural identity” Ayn Rand, for example, describes. Naturally, the system of rents is conserved, yielding, unavoidably, to an elite identity “on demand.”
The on-demand method naturally yields to proper intendency. It is inherently legitimate by occupation, which determines whether you pay rents like a peasant or collect rents like a king.
Collecting the rents naturally consolidates assets. Power is concentrated like the king, reducing the capacity to make demands in the marketplace. Essentially, demand is being horded, but since the middle class is now king, the liability is limited.
To be a lord of the horde, having succeeded the king (and now free to horde as much as you want) by natural right, consolidation of assets is accomplished by means of asset class, which is supported by over-extension of the old system of rents.
To exist with the legitimacy (the identity) of an on-demand dimension, the over-extension of rents naturally results in massive debt. This massive accumulation of liability (supposedly being limited–and actually it does have a limit, which is when “the risk” goes gamma) is managed (ruled, governed, empirically measured) by asset class.
GDP is the collateral that backs the asset class. Since the capitalist does not intend to provide the supply of funds needed to own goods and services, instead of buying we “tend” to rent, which yields to a class of assets that supports the debt needed to demand the supply. Eventually, of course, the debt (the risk) becomes so “big” it is unpayable. The only people left to pay the rents are the people that own and operate the system of extended rents–the people that own assets that identify the ruling class.
Managing the capital with objectivity requires people who can rule beyond the constraints of relative values, like what is good and what is evil. We can sit around all day and argue about that and never get anything done. It’s unproductive.
The ruling class is naturally unsentimental, unsympathetic–objective. It seems pathological–criminal, but you know, it’s their job…it’s their natural identity by occupation.