Because all the credit needs to clear, meaning either the banks create enough credit(money) to pay it all off which is majorly inflationary or they let the defaults begin which is majorly deflationary. Think of a tire under great pressure, you can either let the air out slowly over 20 years, or you can just let it go bang and get on with your life by using the spare tire you brought along (The gold Standard). In one scenario you have great suffering over a longer period and then eventually a major crash at the end, usually ending in a major war, the other way you have minimal deflation because of the intrinsic value of gold and things get back to normal in a short period after the adjustment takes place. Going to the gold standard doesn't make the "Clearing" process go away, that will always happen because it is yin and yang to the principal of credit creation, but the clearing process is usually much much quicker and generally the least obtrusive to the population, but many times more harmful to government due to it's propensity to create credit upon the backs of the very people it is supposed to care for.