Suppose we divide everyone in the society into two corporate A and corporate B, (or similar to an island with only 2 people), each year banks loan out 1 Billion to A and 1 Billion to B, and they do production and consumption and trade with each other. They need to return the loan plus interest. Since the money supply is only 2 Billion, where is that extra interest come from?
Obviously, it can only come from the previous savings of A and B, so if this process continue, sooner or later A and B's saving will be depleted. Of course bankers will also spend their earned interest to buy products from A and B, but since everyone have also the need to save, it can not balance itself
There is a way to avoid this from happening: Continuously issue new loan to A and B, for them to pay back the old loan + interest. And for each new loan, same rule applies, they need future loan money to payback the interest, and if they want to have some savings, even more future loans are needed
But any business have a market size limit, after reaching certain maturity, there are less and less growth, so eventually this model will be broke for any industry
Then the hope is placed on the new enterprises in the future, but that is also non-sustainable. These new enterprises must have much higher income to digest all the existing business' higher and higher sale. With existing enterprise getting more and more, the size of new enterprises will reach an impossible level to support the earnings for all the existing enterprises
As a result, the original observation might be more close to reality: Everyone's saving is depleted slowly by the banks, and saving becomes more and more difficult
