Deleveraging...

[Bryan P.]

Been doing a little bit of reading of Ray Dalio. He argues that the economy goes through short-term and long-term debt cyles. The main idea is that debt cannot significantly exceed wage growth or a bubble is created. I believe he's saying deleveraging happens when the wage growth is trying to catch up with debt burdens. I don't understand, however, how debt can "pass" wage growth. What kind of debt? Consumer debt? Public debt? Government debt? And whatever the case is, what does a full cycle of deleveraging look like? Does this mean if our economy deleverages, that means our income will be higher relative to current incomes?