US depressions: destruction of nongovernment sector equity (aka government debt) always makes the private sector credit structure unsupportable.

Private debt vs Government debt. What's the true problem? Too many dollar bills in your wallet or too many credit cards?

From US congressman Wright Patman, 1941

From Kenneth Boulding's Economics of Peace, 1945

A visual graph that shows the automatic stabilizers in action (in both cycles acting counter-cyclically) - gov fiscal movement in relation to civilian unemployment rate (endogenous relation); Shortfall of nongovernment sector spending gets covered by increased spending from the government sector. Higher nongov sector saving desires leads to less nongov sector spending which (by accounting definition) leads to less income for the nongov sector. When nongov sector spending recovers & rises, government sector spending lowers - more tax revenue due to higher sales and economic activity and less welfare payments do to fewer people being unemployed.

St Louis FED statement: government with its own free floating nonconvertible fiat currency, indebted in its own currency, cannot miss a payment - i.e. cannot go bankrupt.