Borrowing.

Consumption is the finality of all production. Investments are merely a prelude. Growth in consumption depends on the balance of two separate and interdependent processes. Supply and demand must increase at the same rate, to avoid inflation or deflation of the currency.
Increased supply means an increase in the production of commodities preceded by increased investments (1). In creased investments can be financed by incomes or by borrowing. Increased demand means an increase in incomes. Incomes increase as the result of increased investments or of borrowing. Borrowing in both cases is just credit. Virtual currency created ex nihilo by the banking system. And which, once created, is circulated as increased income, for investment or consumption.
Borrowing can finance growth in either investment or consumption. In the first case, it increases the incomes of those who provided the increased investment. In the second case, it increases directly the incomes of the borrowers. Growth in investments can also be financed by incomes. In this case, incomes are diverted from consumption to become incomes once again. Investments increase but incomes do not, except by borrowing.
Borrowing, means paying back. And it will seem preferable to invest income and thereby own the investment, rather than owning a debt. But investing incomes means that demand for consumption does not grow as fast as supply and must be supplemented by borrowing. By shifting the burden of borrowing from investment to consumption, invested incomes change the structure of private property and make it limitless. When increased investments are financed by that part of income which is considered profit (2), the owners of the investments extend the limits of their accumulation to infinity.
Borrowing increases incomes and maintains demand for consumption abreast of increasing supply. Paying back, however, reduces incomes. A reduction which can only be avoided if all previous credit is constantly renewed. New loans (credit, delayed payments, mortgages, etc.) must be granted to balance invested incomes, and old loans must be lent out again as soon as they are paid back. Borrowing piles up, until the stock of new borrowers is exhausted. That is borrowers of proven solvability. However, as loans must be granted in ever increasing quantities, the process is unable to stop, until it is overwhelmed by defaults.
Borrowing comes in many varied forms. But the most important particularity of each form is its duration. The different delays before payment vary from a few hours to 10, 20, 30 years and more. Each delay creates its own virtual currency and thereby helps increase incomes (and/or investments) and sustain growth in consumption. Each delayed payment is linked to a certain time span. Imagine that weekly credit is granted for the first time. This means that all credit granted the first week increases demand. Whereas all credit granted the second week includes the first week’s renewed credit. That is all the first week’s paid back loans. And only credit in excess of the first week goes to increasing demand. These weekly jumps are difficult to integrate into the granting of credit, which follows a more regular growth curve. This periodic disconnect, between credit granted and credit renewed, means that growth in demand has ups and slowdowns. As regular as sine waves.
As incomes are being invested, growth in demand for consumption depends on increasing credit. But the periodicity of credit growth is unavoidable. And each duration of credit has its own cycle, from the shortest to the longest. So that effective growth in demand is the result of adding together all these credit cycles. Which means that at any point in time some credit cycles are expanding and others are not. It also means that the long cycles influence the general trend more than the short ones. Treasury bonds, corporate bonds and mortgages make up most of long term borrowing. « Consumer » credit, « Interbank » credit and discounting are among the numerous kinds of short term borrowing.
Corporations are making so much profit that they don’t need to borrow. And those that do get bought up by pension/investment funds. Mortgages seem to have reached a peak. While budget deficits are already stretched to the limit. In fact, only massive inflation can reduce these mountains of debt. Which grow even faster than I have suggested. As paying back and lending out again must include interest.

(1) Gains in productivity may so reduce the amount of labor as to offset the cost of increased raw materials. But, in general, increased production needs increased investments.
(2) Savings can be compared to profit. They are income over and above the necessary. Part of the Puritan ethic is to prefer investment to extravagant spending. Not spending part of income reduces demand and must be compensated by borrowing. One man’s saving is another man’s debt. The rich save so that the poor may borrow. And the poor save so that the rich may borrow.