The end result is that nobody spends for anything that is not absolutely necessary. Hence most companies have an excess of supply: they fire people, and discount they current production.
Now that more people are out of a job and therefore can't spend much, and the discounts have driven inflation even deeper, even less people spend their money.
It's a vicious cycle. It's what's happened to Japan for the last decade, and it's not a pretty place to be in.
