TL;DR: economists are still stuck in the idea of the market as a perfect force for reaching optimal outcomes. They’re ignoring the simple fact that businesses are putting prices up purely to increase profits. And that they can do this because the economic ideal of perfect competition (where many small firms compete with near-identical products) does not exist. We have a small number of very powerful businesses—oligopolies—in nearly every market for consumer-facing goods.
Your analysis would be true if many people’s economies who weren’t running up debt vs GDP were doing just fine. They are not. Countries with the same relative debt are way worse off lately.