I do know about the paradox of thrift, and it seems not only not paradoxical but actually false. Increased saving both lowers prices (increasing quantity deman

I do know about the paradox of thrift, and it seems not only not paradoxical but actually false. Increased saving both lowers prices (increasing quantity demanded) and lowers interest rates (increasing investment), so the dynamical behavior is self-correcting. In Krugman's example, inflation solved the liquidity problem, but it introduces new disincentives to saving and distorts long-term financial planning. The hard-currency/free-market solution not only avoids these problems, it also doesn't count on an enlightened central banker making the right decision at the right time. My analysis could be mistaken, though, and I'll definitely take a look at Keynes's argument more carefully some time.