Stop us if you’ve heard this one before. The economy is suffering from low growth and high unemployment. Families are struggling with debt. Many are living in homes whose mortgages cost more than the property is worth. All over the world, governments are reeling from the economic and political consequences of excessive sovereign debt.

The president of the United States, Barack Obama, appears before Congress to offer his solution. America, he says, is experiencing a collapse in what economists call aggregate demand. Consumers aren’t spending enough to fill the “output gap”—the theoretical difference between what the economy is producing now and what it might produce at full capacity. Government, he says, needs to cover the difference.