An analogy.

If you have a balance (scale) with two sides and you put a stone on one side, and a stone on the other side, both weighing one pound, it will balance. But if you break one of the stones on one side in half, now you must put two (half) stones to balance the full pound stone.

The stone is like a unit of currency. You can divide it's value into smaller pieces (print more currency, create debt) as much as you like. But if you turn one dollar bill into ten dollar bills (by printing nine extra ones) you cannot pretend that the ten dollar bills (created from the single dollar) are each as heavy (or valuable) as the original dollar that was then cut into those ten pieces.

It would be nice, perhaps, to have some magical process where the government could endlessly create wealth for the country by dividing its currency into smaller and smaller units of real wealth while everyone pretended that the new smaller chunks were just as valuable as the original.

Perhaps a nice idea, in some fantasy world, but not wise.

Still, that is what many politicians try to do. Eventually of course the logical flaws in the strategy start to erode the economy. In a worst case scenario, you will have politicians who "double down" on the strategy, imagining that since the tactic has "always" worked, it will continue working even as the economy melts down.

Carried to the extreme, the terminal phase of this strategy will have the currency eroded outside the control of the government, by natural forces, i.e., the science aspect of economics, the predictable, common sense aspect of economics. And that is where we (America, Europe) are now.

Real currency values have been declining for years (e.g. diluted by debt). This should have led to inflation across the board, perhaps tempered or guided by responsible policy. But we have not seen inflation across the board, in fact even "assets" that should be leading indicators of the economy, like stock markets, reflect more the pessimism about economic growth than the reality of the currency values.

The most ignored aspect of the economic "crisis" is psychological.

Some leaders consider inflation a threat that has to be avoided at all costs, and they promote that notion to people without clearly explaining the logic.

What is the logic?

If you are a person with near zero assets, inflation itself is not a direct threat to your assets. Rather you are at the mercy of nature, then larger economy, a combination of inflation, wages and other factors. If inflation is used wisely you would even benefit from its effect on the larger economy.

If you are a person with $100,000 in assets, perhaps a few years resources to live on, inflation could be a major nuisance, 20% inflation would roughly cut the practical value of your assets in half in a few years. On the other hand, chances are high that most economic conditions would allow you to adapt and stabilize near your previous level.

If you are a person with millions of dollars in assets, decades or centuries of resources to live on, inflation now might be catastrophic. 

If your assets are in intangible derivatives (vague financial instruments tied to other vague financial instruments) then they would deteriorate under inflation unless the economy were growing faster than the inflation rate, something that is no longer likely in Europe and America.

If your vast assets are in inflation proof things, like real estate and commodities (e.g. metals, etc) then the economic policies that allowed you to create your wealth, and which deferred inflation, will probably lead to social unrest as the economy rebalances. Your biggest fear comes not from economic forces but from your circumstance relative to your neighbor. It is a scenario that has played out again and again in all sorts of societies.

So a wealthy person does not today see inflation as a good first choice.

The economic crisis is being "solved" by people who would most stand to lose if the only realistic solution, encouraged inflation, were pursued. They twist and bend and contort to find solutions that will not threaten their substantial derivative wealth, and their positions, but there are no such solutions. They are doing everything they can to make half a pound rock balance with a one pound rock on the scale.

Until reality becomes part of the equation, until common sense is part of the economic strategy, things will continue to accelerate downhill. It is an historic moment, one of those times in history when economics climbs on top of politics. It is a tragic situation developing in our economies, unfortunately at the same moment that broader strategic pressures are getting ready to overwhelm many countries politically. A new world being created, tragically, through our own staggering stupidity.