Investor and economic writer John Mauldin met up with me at the Nasdaq to talk about his new book, Code Red.

Interest rates are near all-time lows. Common sense tells you that would entice people to borrow as much as possible. Yet, the U.S. economy has been shedding debt at an unprecedented rate, and big banks like Citigroup (NYSE:C) are smaller today than they were a few years ago. 

What's going on?

Here's John's answer: