So in order to "reset" the system, why not declare these big institutions insolvent then start new ones up operating under vastly different regulations?
At this stage inflation has to keep going up in order to make the value of the loans today look quite small in ten years time so that the money we earn in ten years time can keep up with the interest payments on the debt we have today. Its whether we are still earning any money in ten years that determines if we're still able to pay it off. When the earning stops, then the debt comes crashing down because it can't be repaid, then the govt steps in and then the system gets artificially inflated and hence we have what is occuring now - a bubble due to govt influence. What happens when the govt stops earning money...
Someone ask the third world countries that have uncontrollable debt...
Remember its confidence that causes crashes, not any particular level of debt or statistic that says it should happen. Pray for calm people...