That is not what this is about. More spending doesn't necessarily mean more consumer spending and less saving.
Yes you can increase aggregate spending through consumer goods spending, but you can also increase spending and aggregate demand by having people buy more investments. You can spend and save at the same time. There are many ways to spend and save at the same time. You can buy something you are only going to need later, you can buy stocks in a business that will use the money to buy equipment and employ people, you can lend to a business that will buy equipment and employ people. This is all the economic equivalent of investing, the I in the GDP equation C+I+G+(X-M)
The only thing you need to prevent is people and organisations sitting on idle cash or cash like investments. That's what destroys the economy. Anyways fiat is a fictitious form of saving on the aggregate. It doesn't produce anything and people accumulating it doesn't increase the amount of stuff they will be able to buy in the future on the whole.
The point is to move the economy away from idle fiat and into consumption or investment.
>The only thing you need to prevent is people and organisations sitting on idle cash or cash like investments. That's what destroys the economy.
Not true. Cash kept in banks is reinvested in the economy. If companies like Apple keep billions in the bank, it has the effect of lowering interest rates and therefore encouraging investment.
Clarity in economic thought comes when this incorrect bit of Keynesian relic thinking is discarded.
Yes you can increase aggregate spending through consumer goods spending, but you can also increase spending and aggregate demand by having people buy more investments. You can spend and save at the same time. There are many ways to spend and save at the same time. You can buy something you are only going to need later, you can buy stocks in a business that will use the money to buy equipment and employ people, you can lend to a business that will buy equipment and employ people. This is all the economic equivalent of investing, the I in the GDP equation C+I+G+(X-M)
The only thing you need to prevent is people and organisations sitting on idle cash or cash like investments. That's what destroys the economy. Anyways fiat is a fictitious form of saving on the aggregate. It doesn't produce anything and people accumulating it doesn't increase the amount of stuff they will be able to buy in the future on the whole.
The point is to move the economy away from idle fiat and into consumption or investment.