Skip to main content
No. of Recommendations: 0
How can anyone increase the amount of real resources by letting people save more money.

As I understand they way this works, in a macroeconomic analysis, increased savings by individuals results in more investment in capital resources, which leads to more productive capability.

In other words, if I invest in the bonds of a large company, they will aggregate my investment with that of others and buy a machine tool which will allow more production with less labor input, and possibly even less raw materials. Same with stocks.

Savings does lead to an increase in real resources.

The great big glaring exception is purchase of government bonds, where the money is used to increase spending. This does not increase the amount of real resources.
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.