Mish does debt deflation

The Fed desperately needs to keep credit expanding or the economy will collapse. However, it's an unsustainable scheme.

In 1984 it took $1 of additional debt to create an additional $1 of Real GDP.
As of the fourth quarter of 2018, it took $3.8 dollars to create $1 of real GDP.

If interest rates were 3.0%, interest on total credit market debt would be a whopping $2.16 trillion per year. That approximately 11.5% of real GDP year in and year out.
Choking on Debt
The Fed desperately needs to force more debt into the system, but the system is choking on debt.
One look at the above chart should be enough to convince nearly everyone the current model is not close to sustainable.

So, interest expenses cannot be 3%  per year, the upper bound. The ten year will have to go to 1.5%, and that is not happening unless we blue bar.  Once we get a blue bar, then it is all over, it is MMT time.