The counterpoint is the more intuitive certainty that if times are tough, everyone should tighten their belts, including the government. spinonthird has alread

The counterpoint is the more intuitive certainty that if times are tough, everyone should tighten their belts, including the government. spinonthird has already pointed out the Paradox of Thrift. I would add that a lot of confusion surrounding this particular topic comes from the widespread inability to distinguish between real tough times and monetary tough times. By monetary tough times I mean: bank collapses, loan defaults, low available income. By real tough times I mean: lack of available resources, natural disasters destroying infrastructure. In real tough times, it is true that everybody should tighten their belt. Typically, they are forced to do so via inflation, and if the government refuses to listen there will be hyperinflation. In monetary tough times, tightening your belt personally is your only choice due to the constraints that you have. But it is exactly the wrong response for government to tighten its belt as well. Rather, government - especially monetarily sovereign government - should use its unique position in the economy to get the economy going again, to enable the real capacity available to be used. Observe how a simple confusion of these scenarios can lead to incorrect predictions, similarly to how so many people predicted back in 2009 that raging hyperinflation should have happened by now. They were obviously wrong, and I posit that underlying their wrongness is the inability to properly distinguish between real and monetary phenomena.