Complex sentence: This increase in debt during the period helped stimulate the economy (arguably hiding the true state of the economy) and then began holding back the economy as consumers paid down debt (which reduces economic activity) rather than spend.
Split into simpler sentences: This increase in debt during the period enabled spending that stimulated the economy (arguably hiding the true state of the economy). This debt overhang then began holding back the economy as consumers paid down debt (which reduces economic activity) rather than spend.