The bank and government crisis loop

The statement below could be, and probably was, allready written in 2008. We probably found it too exagerated back then. Do we now ? It is ackwardly coming close.
Full article can be found here

“Then there are pernicious feedback loops. Tighter money market conditions feed into lower growth, increasing the problems of government finances. Falling tax revenues and rising expenditures push up budget deficits, requiring greater borrowing. Lower growth feeds into greater business failures that increase bank bad debts, feeding further tightening in lending conditions and the cost of finance.”

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