From Keynes, from yesterday:
...the maxims which are best calculated to "enrich" an individual by enabling him to pile up claims to enjoyment which he does not intend to exercise at any definite time.
Savings relative to circulatings:
|Graph #1: Starts low. Ends high.|
Blue is M2, red is MZM, green is M3, in each case with circulating money (M1) subtracted from it, and the difference shown as a multiple of circulating money.
And, for comparison, the orange line is total debt (TCMDO) with "circulating" money MZM subtracted from it, and the difference shown as a multiple of MZM.
Looking at the red line, non-circulating MZM grows from equal to M1 in 1959, to five times M1 by 2007, when a sharp decline sets in. A five-fold increase.
These non-circulatings are all of them measures of the claims to enjoyment that are not intended to be exercised at any definite time. In other words, they are measures of the absence of aggregate demand.
Our economic policies for the period shown on the graph have propped up aggregate demand by increasing various measures of money, and simultaneously undermined aggregate demand by increasing various encouragements to take those dollars out of circulation, and save them.