The system has been developed over centuries, and if most people "play" by the rules, then it works, even works well.
.... But recently things went wrong.
1) In order to lower their prices, firms relocated operations to Asia where employees accepted (much?) lower pay, so that the prices of the products are (much?) lower than those of competing firms here. Then they sell them here.
2) People buy goods of similar quality that are less expensive, so that mainly goods made in Asia will be bought, rather than goods produced here.
3) That means that local factories will have to lay off employees, more and more until, hopefully, people will again buy mainly locally-produced goods, if ever.
4) People who have lost their jobs will buy less, making things even worse locally.
5) The various governments provide a lot of (borrowed plus taxpayers') money in an attempt to keep firms afload (read: keeping their employees employed), and to get more local people to buy more. Buy what? More goods made in Asia?
6) That Band-Aid help isn't enough. The basic reason of people NOT buying local stuff is not being addressed.
7) That problem with credit is caused by debtors not being able to pay on time every time what they agreed to pay. Probably because they lost their jobs. Why? See above.
8) Credit is more difficult to get because lenders do want their money back as agreed, and many borrowers may be still employed now, but for how much longer? Then they too will not be able to pay what they owe on time every time.
9) Governments buying bad debts must expect no repayments, ever - This is equivalent to having the taxpayers pay the debts instead of those who at one time had agreed to pay them.
10) Borrowing by governments is expensive, and the interest on the much too high national debt, and other debts, payable is already much too high. If and when interest rates will get higher, the debt charges will get even higher still. Maybe all lenders soon will require higher interest rates! Beware of the coming inflation! Inflation is equivalent to a tax on savings.
11) Printing money, too much money, is very dangerous - Read up what happened in Europe financially during the early 1920 when interest rates went up, and up, and up! Compare with the finances in modern Zimbabwe, in Africa, too!
12) As people lose their jobs, they need money to live on nevertheless. So they pull out money from their reserves, such as the stock market. It is quite normal for prices to get lower and lower if more people want to sell than want to buy.
Then their savings get lower and lower. If they want to sell their homes, then, similarly, the prices of homes will get lower and lower.
13) The market does what is quite normal, the system will work if most people would obey the rules.
14) Out of work? Move to Asia!
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