The objection I hear most often to public spending in a downturn rests upon an analogy that sounds like wisdom and conceals an error. The government, it is said, should behave like a thrifty family: when its income falls, it should tighten its belt. For a single household this is sound. For the economy as a whole it is precisely wrong, and the error has a name worth remembering: the paradox of thrift.

Consider what happens when a shock frightens everyone at once. Each household, sensibly, resolves to spend less and save more. But one person's spending is another person's income. When all cut their spending together, incomes fall across the whole, and the very saving each intended is defeated, for there is now less income out of which to save. The private economy, left alone, can settle into an equilibrium of idle men and idle machines, not because anything is broken in the factories, but because demand has fled and no single actor can restore it.

It is here, and chiefly here, that the public hand has both the capacity and the duty to act. The government is the one actor large enough to spend when all others are retrenching, and by spending it can arrest the downward spiral and set incomes rising again, at which point private confidence, and private spending, return. This is not charity, nor is it a permanent expansion of the state. It is the counter-cyclical use of a power only the state possesses.

Let me add the caution my critics forget I insisted upon. The argument runs in both directions. What justifies the deficit in the slump obliges the surplus in the boom. The time to repair the roof, as it were, is when the sun shines. Stimulus without that discipline is not my doctrine; it is my doctrine abandoned halfway.