Frome their perspective, there's nothing wrong with a business or an individual paying down debt and saving cash-- it makes a lot of sense in fact.   But that's part of the problem-- it turns out that if everybody quits spending all at once, it slows down the economy, people lose their jobs, and you've got a depression on your hands.

Here's an analogy: frugal behavior on an individual is kind of like when a quarterback throws the ball out of bounds to avoid a sack or an interception.  It's often seen as a good decision by the quarterback because it is the safe choice that avoid risk and possible worse outcomes.  But extremely frugal behavior on an aggregate basis is like a quarterback throwing every pass out of bounds to avoid interceptions.  The ball never moves down the field and the offense stalls.