I hope that bankruptcies rise but then level out at a sustainable rate, for all of our sakes. It seems like most governments, companies, and individuals are drunk on debt right now. Slowly, steadily cutting off the rotting part sounds reasonable to me.
What are the alternatives? Dropping interest rates and allowing these sick entities continue to accumulate debt? Raising interest rates and causing a cascading effect of bankruptcies? They both sound unhealthy to me.
I suppose I omitted inflating away all debt, but my impression is that high inflation isn't a tool one wields much control over.
I remember reading about the immense debt around the time of the French revolution in both France and England. The French "ate the rich" and allowed inflation to erase government debt. England stuck to the plan and spent (from memory) a century in somewhat austere conditions paying down theirs. I find it tough to stomach both options, either will disrupt the calm and stable economy I've spent my entire adult life in so far. It's not a "need", things at this point simply will change.
What are the alternatives? Dropping interest rates and allowing these sick entities continue to accumulate debt? Raising interest rates and causing a cascading effect of bankruptcies? They both sound unhealthy to me.