spend spend spend or save save save

I've just had a double heap of mountainously teeming-over spoonfuls of vanilla Wall's ice-cream and it's almost time for Yours Truly to hit the sack. But having gorged on dinner's desserts and with my tummy taken care of, i got to thinking about what Paul Krugman, Economics Nobel Prize winner, had to say about the current ascendency of fiscal consolidation over quantitative easing in the minds of policymakers worldwide. Old Paul thinks that governments shouldn't rein in the horses not yet anyway, while growth is tentative and the recovery is still fragile. And he's about right on quite a few points there. To raise interest rates dramatically, slash govt spending on welfare would crimp the spenders for sure and lead to less business. But on the other hand, higher interest rates after a record zero interest rate regime in the USA for the longest time known - ever - wouldn't be such a bad thing either. People would, in the USA at least, be motivated to start saving for a change. There would be less foreclosures when people have a nest egg. The mortgage crises would see improvement. Sure, borrowing costs would go up. But reckless lending has been the bane of us all this recent while, no? So some control on lending, especially of the reckless kind, would be welcome surely. The truth lies somewhere in the middle. We can't continue to spend spend spend. And we can't all become Scrooge McDucks. Someone has to bring balance to the force.