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allow the boom cycle to prolong. Using debts, the consumers can artificially increase their demand over the natural line, allows the supply to increase over where it should be. To the producers, in short term, this is good, since they can increase their sales and profits in next month, or next quarter, or even next year. Thus, they encourage consumers to use debts. They make debt easy, so that the consumers can buy more and more. As the consumers buy more, the producers produce more, until a point when the supply goes over even the artificial demand line, and the burst cycle starts.

This is where the whole economy gets messy. Because the consumers and investors have been using debt, they thought they are more wealthy than they actually are. Thus, when the burst cycle hit, they will painfully realize how little their wealths are. As the creditors seek to regain the money they lend, the debtors, consumers and investors, cannot pay back. This would lead the debtors to bankruptcy. However, the fate of the creditors is no better: in the end, they still don't get their money back. Hence, after the debtors go bankrupt, the creditors themselves go bankrupt, then the creditors of the creditors go bankrupt, and so on. This makes people with some money left discouraged to lend. Because people do not lend, producers have no capital to resume producing, and go bankrupt also. A vicious bursting cycle keep falling down, until it hits a point that it cannot go any lower (for example, everyone goes bankrupt, so no one owes anything). Only after reaching that point does the market starts going up again.

Now, let me get this straight: the market will be able to go up. It is market's nature to seek equilibrium. In the long run, it will eventually get into a new boom cycle. However, to quote economist Keynes, "in the long run, all of us will die." How long will the burst cycle be? And who will it affect the most? Will we be able to survive that long to see the market goes up again? By the way, it's a long time since the market starts the boom cycle until it gets comfortable. Thus, it may take years for the people to suffer!

The above cycle is why discouragement in spending and investing needed. In the boom cycle, especially near the end, spending and investing must be discouraged, so that people won't start investing and buying recklessly using debts. This is important for the market to find its equilibrium point, and for us to know where to stop. As the spending and investing slow

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