Fairy tale

Let me tell you a fairy tale about one not-so-poor family. There is a husband, who makes gizmos and sells them to other families. His wife cleans his home, cooks etc. They are a strange family so they pay each other money for everything they do. Wife gets money for cooking a dinner from husband, he gets money from her when she uses a gizmo etc.
Both of them are buying lot of crap - new large HD TV, new Ipods, IPhones,Italian shoes, French wine cars and other rather useless stuff they just have to have. They spend much more than they earn. But it was not a big problem because other families believed that the gizmos the guy was developing will be selling well and so he and his wife was able to borrow a lot. Because they were a rich family, they had their own money unit (say dollars). So all their outstanding loans were in dollars and they were able to print more, if necessary.
They lived happily and borrowed merrily until a crisis came - there was nowhere to borrow!
They had two options - stop spending, start saving. It would not be easy, because if wife does not uses a gizmo, the husband does not have money to pay for her cooking. So it would hurt a little.
But since they could print the money and borrow them, there was a second option that seemed so much better - just borrow from their own little printing machine and keep spending. Some might say that those money circled a little and left their happy family for some larger HD TV, but that would ruin this fairy tale. Instead, they kept borrowing from their printing machine, until ... It's time to go to bed, kids!

If you don't understand what this fairy tale is saying, you have probably lived on a remote island for a last year or two. Or you study economics. In any case, read guru Krugman. If you think spending will get us out of the mess it get us into, you should get a PhD, too. Honoris causa.