Everyone saving more money at once can leave everyone poorer

If every household tries to save a larger share of its income, total spending in the economy falls, companies earn less, and incomes shrink — potentially leaving total savings unchanged or even lower than before. Keynes popularized this paradox of thrift as an example of the fallacy of composition: what's smart for one saver can backfire when everyone does it simultaneously.

— John Maynard Keynes, The General Theory of Employment, Interest and Money — 1936
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