I have an inkling that economics is a hard area to make predictions in, because they can become self fulfilling.
So in your example above - yes, on an individual basis it may make sense to pay off your debts, stock up with tinned goods & ammo and hunker down.
However if there's broad movement in the population to stop spending on all the stuff we spend on, then that money doesn't go around the economy from my pocket to say the sparky, from his pocket to the coffee shop, from the coffee shop employee to JB Hifi etc...
My preferred fix would be a slightly more socialist slant to our democracy/capitalist system. Using methods such as @nomadpete's idea of a transaction tax to shift more of the burden of taxation from the poor to the wealthy. Better and more targeted taxation of large companies and what I would class as "obscene" private wealth (what individual needs more than say 20 million dollars?) Smarter spending of defense budgets so we're not just equipping for the last war but for how future ones will be fought. A change of focus in housing stock from being an investment to being owner occupied.
There are vast stocks of wealth locked up in things that don't cause economic activity - people sitting on empty houses to make a killing when the capital value increases, tucked away in trust funds, etc. There must be ways to disincentivise this.
A clever country shouldn't have to have cost of living crises (or homeless people, or people who have to choose between eating or heating).