Since lending is effectively the mining of new fiat tokens, there is a strong economic incentive to issue debt. Financial institutions stand to profit from creating new money, and a lending license is highly sought after.

Politicians and bureaucrats also face strong incentives to encourage lending, as increased lending leads to increased investment and spending. According to the simplistic Keynesian economic model, which dominates the highest levels of politics and academia, increasing these factors in the short term is always the first solution to any economic problem.

The short-term economic boom from credit expansion is all that a politician cares about, as the long-term consequences will likely be left for their successors to deal with. Moreover, these long-term consequences can always be blamed on convenient current scapegoats rather than obscure past credit policy decisions.

~ Saifedean Ammous

The Fiat Standard