Cfrtjryk

A vicious cycle is the term you want.

2. a chain of events in which the response to one difficulty creates a new problem that aggravates the original difficulty

^[M-W]

EDIT: The term is also known, as others have pointed out, as vicious circle. I prefer cycle because it better connotes the iterative nature of the process.

Here are some usage examples from vocabulary.com:

Science:

As Arctic permafrost thaws, it unleashes a vicious cycle—the unfrozen soil releases its carbon reserves that intensify climate change, in turn accelerating the thaw.

^{Scientific American Feb 9, 2018}

Technology:

This reversed a vicious cycle of previous generations that saw high data costs leading to sparse use of data-heavy features, and sparse use of data-heavy features being used to justify high data costs.

^{The Guardian Jun 29, 2017}

Business:

A rising dollar increases the value of dollar debt in local currencies, making repayment more difficult and depressing currencies further in a vicious cycle.

^{New York Times Jul 13, 2018}

Sports:

Observers now describe a vicious cycle in which fewer at-large bids for leagues and teams lead to fewer resources and less exposure, leading to declines in recruiting and performance, leading to fewer at-large bids.

^{New York Times Mar 15, 2017}

It's feedback, or more specifically positive feedback:

the enhancement or amplification of an effect by its own influence on the process that gives rise to it.

GOOG

"Positive" here is not a judgement on the result as good or bad. It's a statement that the cause is magnified, and often yields unstable behavior. Negative feedback usually diminishes the effect.

the diminution or counteraction of an effect by its own influence on the process giving rise to it

GOOG

Not a single word, but a downward spiral or (less commonly) a death spiral. Wiktionary says a downward spiral is, "A series of thoughts or actions which feeds back into itself, causing a situation to become progressively worse."

"Snowball effect" might also work for you. Where as things progress, the results build upon themselves for good or bad.

It comes from the idea of a small snowball rolling down a snow-covered hill, and the snow sticks to the snowball causing it to continually increase in size as it rolls down the hill.

The correct term for this is a 'positive feedback cycle' or a postive feedback loop.

It sounds unintuitive as the word 'positive' is mostly associated with improvement. However strictly speaking it is correct as here we are saying that the gap between the the current state and the ideal state INCREASES (i.e. by a positive amount) after applying the change, so things are worse off than when we started.
A negative feedback loop would be one where the effect is diminished after each cycle and moves closer to the ideal state.

A few similar terms which haven't been mentioned:

• 
  chain reaction — a series of events, each caused by the previous one.


• 
  domino effect — the cumulative effect produced when one event sets off a chain of similar events.


• 
  ripple effect — the continuing and spreading results of an event or action.


• 
  butterfly effect — the phenomenon whereby a minute localized change in a complex system can have large effects elsewhere.

Vicious spiral. Subtly different from a circle, since in some respects the situations the same (e.g. everyone's poor, the war's still going on) but in others it's different (e.g. an extra three zeroes on the banknotes, more people are dead).

Depending on how much flexibility you have in using the term- a figurative term for this could be a "catch-22"

For example: "To get a job- you need work experience but to get work experience- you need to get a job. Now that's a catch-22."

It's based on a book called Catch-22.

Other words could be- counterintuitive. Sometimes written with a hyphen as counter-intuitive or even as two seperate (or separate) words counter intuitive.

Contrary, contradictory, paradoxical.

Hope it helps!

You've already had the best three answers I can think of, but if you have other situations in mind than your example, another suggestion or two (not one word, sorry):

• 
  

  Mutually Assured Destruction

  
  
  

  This usually applies to (international) political situations (the definition is generally given as some variation on "it's a military strategy"), but is often used metaphorically to describe interpersonal relationships (including both intimate emotionally-charged and professional ones) — precisely because it very much carries a sense of inevitability and of any action by either side worsening or at least perpetuating the situation.

  
  
  

  *Yes, I'm aware Wikipedia is not always the reliable reference we'd like it to be, but this entry "seems legit" as far as I can tell.

  
  


• 
  

  Deadly embrace

  
  
  

  Also carries the sense of inevitability and "doom" (for want of a better word).

  
  
  

  This one is also often used to describe a political or military deadlock (and it also has a technical use in computer science to refer to a process deadlock, but that derives from the earlier meaning, and loses some of the “progressively worsening” feeling of it).

  
  
  

  At its simplest this describes (for example) the situation of an occupying force in a foreign country where they “invaders” feel they cannot leave due to their belief that they are “keeping the peace” and that “it would all fall apart without them” (or simply that they would lose whatever benefit they gained from invading in the first place) but their presence is both costly to the invaders and strangling the development of the hosts.

  
  
  

  Another example, which is something of a cliché:

  
  
  

  
  

  The fossilised remains of a Tyrannosaurus Rex and a Triceratops have been unearthed, still locked together in a deadly embrace that has lasted 68 million years.

  
  

  
  
  

  However this example also lacks the “progressively worsening” aspect unless you are describing the eventual outcome from a point-of-view contemporaneous with the final throes, death struggle, etc etc.

  
  

A cycle of degradation.

A cycle of degradation which leads to ecological collapse (or catastrophe).

Cyclic collapse of the system.

Cyclic collapse of the ecology.

Though the question asked for a word, the phrase "negative feedback loop" is the one that comes to mind first. In the cited example, declining fish populations trigger a decline in coral health, which further decreases fish population which further reduces coral health and so on.