"The bad metaphor — which you’ve surely heard many times — equates the debt problems of a national economy with the debt problems of an individual family. A family that has run up too much debt, the story goes, must tighten its belt. So if Britain, as a whole, has run up too much debt — which it has, although it’s mostly private rather than public debt — shouldn’t it do the same? What’s wrong with this comparison?
The answer is that an economy is not like an indebted family. Our debt is mostly money we owe to each other; even more important, our income mostly comes from selling things to each other. Your spending is my income, and my spending is your income."
But shouldn't Krugman be asking if your spending should be my debt, and if my spending should be your debt?
When government spends, it indeed becomes our debt. And when government spends at an unsustainable level, its citizens are inevitably crushed by the repayment burden.
Moreover, when individuals or non-governmental agencies spend or gamble wildly, this does not and should not become the government's debt. However, this is exactly what has happened in the instances of the big banks, which teetered on the brink of failure just a few years ago, and in the case of Solyndra.
Instead of spending at an unsustainable level, i.e. printing money that must ultimately lose its value, might it not be a better idea to first put an end to a meaningless war in Afghanistan, which is bleeding the economies of both the US and UK white? In the case of the US, I'm confident that better use can be made of the $8 billion being burned every month in the wilds of central Asia. Peculiar how this issue is not being debated by Obama and Romney.