You almost have it but not quite. Debt is a way to recirculate capital. Capital must circulate if it is to retain its value.

The problem isn't debt. This is a symptom and not the disease. The problem is capital has more value than labor or real useful things such as commodities and services. Capital value has been inflated, while all other monetary values have been destroyed.

The only way for this imbalance to be fixed is to destroy the value of capital. This would mean a complete destruction of the current capitalist monetary system and a reset. I think this is what we are seeing today. The only questions is how will this all play out?