Krugman: Spend Now, Save Later

[Final-Fan]

In addition to what others have said: 

I think the problem of "double counting" applies to the entire idea of this "loan value".  I mean, on the one hand you're saying that 1 dollar given to the bank gives it a theoretical "loan value" of (approaching) 10 dollars because it can loan 90% of it out to someone, who puts it in the bank (or more realistically spends it on someone but the point is it eventually probably mostly gets put in the bank by SOMEONE), which loans 90% of that out to someone, who puts it in the bank, etc. ad infinitum. 

But on the other hand, apply that argument to Person A and Person B.  Person A puts his dollar in the bank.  Bank loans their 90 cents out to Person B, who puts it in the bank as well.  But wait!  Person A's dollar's "loan value" is counting Person B's money's loan value!  Person B's dollar (OK, 90 cents) got counted twice ... and this happens at every point along the chain!  If you apply that to every dollar everyone puts in the bank, then aren't you counting everyone's money many, many times over in your calculation of loan value? 

I mean, maybe an economist could look at my post and laugh at me, but right now I don't see how it makes sense.