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They spend less in other businesses, which lose their income too, producing a vicious downward spiral that ends in economic collapse. The solution is for the government and Reserve Bank to step in and substantially increase spending and support businesses to fill the gap until the private sector recovers.Failing to expand government spending significantly would have catastrophic long term consequences: huge increases in the number of unemployed people (many of whom will never work again), the destruction of thousands of healthy businesses (many of which will never recover) and the permanent destruction of income, wealth and the earning potential of our young people, to say nothing of increased suicides, increased mortality among the very young and very old, increased domestic violence, increased attacks on minority groups, the rise of political extremes and the increased probability of war. The benefits of increased spending are simply enormous.Put simply, the costs of increased government spending in normal times do not apply.Conversely, the costs of increased government spending are very low.

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