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>People sell stuff for currency and this creates a chain of transactions. If someone saves money beyond what they intend to spend, it's like damming a river. Th
by throwaway248329 5y ago
>People sell stuff for currency and this creates a chain of transactions. If someone saves money beyond what they intend to spend, it's like damming a river. There are less transactions on the other side, in extreme cases no transactions may happen
Please explain how does me not spending money stops others from spending theirs?
- MrMan 5y agoif everyone doesn't spend any money, and incentives encourage hoarding treasure instead of productive work, this is a bad outcome in the aggregate
- throwaway248329 5y agoNot hoarding, it's called saving. And people would still spend money because everyone has their own time preference and we're all going to die someday anyways. On the positive side, economy with a large number of savers would be less vulnerable to crisis. Governments won't be afraid to let zombie-companies die, because they know that people are not going to starve when this happens.