Re: "infinite wants" vs. decreasing marginal propensity to consume

[Charles Anderson <chasna@xxxxxxxxxxx>]

Gregoire de Nowell (ci-devant) wrote:

> The "paradox of thrift" is that savings TODAY is consumption
> foregon TODAY which decreases income TODAY and therefore
> decreases net aggregate income and as a corollary the
> potential for savings.  To think of it as deferred
> consumption is at the aggregate level an error (if
> I understand my Keynes, which I'm sure many may care
> to dispute).  Individuals may think of it as deferred
> consumption, but at the aggregate level it is shrunken
> income.

Chas writes:

If monies used for some specific purchases in the consumer
goods industry are withdrawn, then where did they go? If
they were used directly or indirectly for purchases in the
capital goods industry, then the contraction of income in
one industry is match by the expansion of income in the
other. There has been an increase in saving, but no reduction
in income. The question that must be answered is " where did
the money go"?

Chas