Either, Or

There is no other choice

You can spend a dollar, or save it. There is no other choice. Keep a dollar, or let it go. If you keep it, that's saving. If you let it go, that's spending, Save and spend are the only options.


I guess that's the simplified version. I'd swear I got it from Keynes, but I can't find the reference. I didn't imagine it; I don't have that much imagination. Maybe I read something in Keynes and reduced it. I'll find the reference, eventually.

Keynes did say this: saving is the excess of income over consumption.

Income is money that comes in. Consumption is money that goes out. The difference is saving. That's direct from Keynes. And it translates directly into my you can only either save or spend. Maybe my memory's not so bad after all.

Anyway, economists keep track of how much we save, what percentage of our income and all that. And they track how much we spend, of course, and how many dollars are being spent and how frequently we spend those dollars.

It starts to sound creepy, doesn't it.

It's fascinating. Take the people out of it. Don't worry about their decisions. People make their own decisions. Just look at the results. Measure the results. Measure it in terms of dollars. Know what you're lookin' at? It's the economy. Yeah. And it's totally amazing.

The money in savings, economists count as savings. The money we don't put into savings. they count as M1 money. But there's two different things goin' on here. Savings, you put money in savings, it sits there. It's easy to count. That's one thing.

The money we don't save gets spent. It's income that get's spent, part of income, or most of it, or all of it. But first it's your income. Then it's the next guy's income. And then it's the guy-after-that's income. But it's the same dollar, spent repeatedly. This is difficult to count, like trying to measure a snake. So I think they use a different process to count it. But anyway they count it. And they call it M1. It's the cash in our wallets and pockets and in our pocketbooks, and in the change cup in the kitchen. And it's the money in our checking accounts, too. It's spending money, the money we spend. It's the money that circulates.

Am I beating a dead horse here?

If you spend a dollar, it is circulating. If you save it, it ain't. That's all.