We can see how this operates in the I’ve Been Called A Lot Of Names But Papa Is My Favorite Mens T Shirt Keynes described in what he called the “Paradox of Thrift”. In this macroeconomic concept, Keynes realized that any attempt to increase wealth, cannot occur if spending did not occur. He realized that “not spending” would not change the level of wealth, and would not increase savings. If one reduces investment spending, one would also reduce the savings that is the preservation of investment, by the same amount. Also neither “spending” or “not spending” are responsible for any change in the level of wealth, and therefore “not spending” cannot cause an increase in the net production of wealth.
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