[rsj_hn]

> If the savings rate of one person exceed the total investment rate then another person must save less than the investment rate.

Yes, at the macro level, investment (defined as an increase in capital equipment or inventories) must equal savings in terms of national accounts, but incomes and rates as well as the foreign sector all adjust to make it so. You cannot say one controls the other. It is an equilibrium condition on a number of variables.

It's like saying that the quantity of stocks bought is the quantity of stocks sold - an equilibrium relationship -- and so whether stock volumes go up or down is completely determined by sellers -- a casual mechanism invented that satisfies the equilibrium relationship even though it is false.

So you cannot take an equilibrium result involving many variables and use that to deduce that one of the variables is independent and the other is dependent just by linguistic or emotional affinity.

Next, that type of savings/investment identity in the national accounts has nothing to do with financial borrowing/saving of the household sector nor even of "the poor" or "the 1%". What you are thinking of -- say a household takes out a mortgage to buy a house -- is a balance sheet expansion that is invisible to the national accounting and contributes nothing to savings or investment. What would contribute to savings/investment would be when the house is remodeled. So if I invest in my house by adding a better bathroom, then that will add savings to the economy as a whole. You can imagine that various inputs, for example, cement, are consumed in the course of expanding the bathroom, so the savings is the value add -- e.g. the value of the improvement net of the consumption required to make the improvement. And over the economy as a whole, if you add up all the savings (in terms of capital), you will get all the investment (when things like inventories are property treated). But this is not what the blogger means when she is complaining about "the 1%".