In Friday’s column at the New York Times, Paul Krugman outlined exactly what was wrong with the manner in which most governments have responded to the world economic crisis. In particular, he discussed how Japan’s half-measures have helped create “debt dynamics” based on a notion of respectability that’s an “economy-killer.”

The problem in Japan, he argued, is deflation, the solution to which is simply to print more money. The Japanese central bank has been doing so, but because of low interest rates, “there’s no real penalty for sitting on cash,” so that’s what individuals and institutions are doing.

What they need to be doing to is “us[ing] it to buy stuff,” investing in “slightly risky assets in the hope of…pushing up asset prices and persuading both investors and consumers that inflation is coming, and so they’d better put idle cash to work.” Instead, politicians are imposing austerity measures that hamstring the efforts of central banks to fight inflation. Why?