As another commenter observed, debt in and of itself isn't a bad thing - but it rather depends on what the nature and purpose of that debt is.
Monetary debt is one thing, but technical debt is what is actually killing us, in my view.
I think there's something else going on that hasn't really been considered or identified, and it's that cycles of adoption and innovation now overlap so tightly with ever increasing levels of technical prerequisites to adopt that we are now in a state that by the point a new technology or new means of efficiency is adopted, it is obsolete.
I've been thinking more about this over the last months as a result of watching governmental IT projects where they are adopting unsupported software, as when they started their projects a decade or more ago, it was new.
That doesn't seem so bad on the surface of things, but it leads to a few outcomes:
Incumbent organisations tend to be the ones funding R&D, producing innovation. Massive incumbent organisations can take advantage of their own innovations as they have sufficient mass to sustain a lengthy adoption cycle, and can afford the capital outlay. This builds vast multi-sector monopolies which self-sustain and block out competition through sheer inertia. As time progresses the incentives to innovate decrease for these guys, as they own the entire market, so need not compete on utility, nor even price.
Smaller incumbent organisations, however, end up saddled with technical debt, and the only way out for them is tabula rasa - i.e. to write off sunk costs, and start with new tech - or go bust.
New organisations start with a blank slate, and can thrive for a while - but unless they have a strong strategy for stemming technical debt, they end up as a "smaller incumbent organisation".
This boom-bust cycle of profitability followed by obsolescence accelerates as the evolution of new technology accelerates, and the overheads and complexity of adoption increase. Complexity increases as the sum total of moving parts in society and technology always grows, and overheads increase as more advanced technologies tend to require a larger capital outlay to implement.
Where this leads is ultimately to a deadlock type situation, where innovation ceases to be profitable as adoption is too slow to allow a new tech to flourish before it is superseded, and ultimately stagnation, and collapse.
So... if I had to point to one thing that could make a big difference to how the global economy functions, it would be a complete revamp of patent law around the globe. I'd love to also think that we could move away from the idea that Everyone Must Work, and actually start to realise the benefits of the vastly increased efficiencies of the last several centuries, but the ideology is so entrenched at this point that the only thing likely to allow a change will be outright collapse of our current system of the world.