Hitting the debt wall is a dire financial situation that can occur when a nation depends on foreign debt and/or investment to subsidize their budget and then commercial deficits stop being the recipient of foreign capital flows. The lack of foreign capital flows reduces the demand for the local currency. The increased supply of currency coupled with an increased demand then causes a significant devaluation of the currency. This hurts the industrial base of the country since it can no longer afford to buy those imported supplies needed for production. Further, any obligations in foreign currency are now significantly more expensive to service both for the government and businesses.
This same concept has also been applied to personal debt. Specifically it has been applied to students who get in over their heads with student loans to finance their education.
Famous quotes containing the words debt and/or wall:
“A good debt is not as good as no debt.”
—Chinese proverb.
“What harm cause not those huge draughts or pictures which wanton youth with chalk or coals draw in each passage, wall or stairs of our great houses, whence a cruel contempt of our natural store is bred in them?”
—Michel de Montaigne (1533–1592)