From Paul Krugman: So, in order: 1. The economy isn’t like an individual family that earns a certain amount and spends some other amount, with no relationship between the two. My spending is your income and your spending is my income. If we both slash spending, both of our incomes fall. 2. We are now in a situation in which many people have cut spending, either because they chose to or because their creditors forced them to, while relatively few... Read more