There's also the situation that if a household's finances are tight, they can often rectify the situation by not spending money on things that aren't essential.

There's also the situation that if a household's finances are tight, they can often rectify the situation by not spending money on things that aren't essential. If a government imposes austerity measures during a recession, it can make the recession a lot worse, because that government spending was used directly or indirectly on goods and services, creating economic activity.