[lisper]

> consumption being the opposite of saving

No. The opposite of saving is spending. You can spend on capital as well as consumption. Inflation only devalues cash, i.e. money you keep in your mattress. You can avoid inflation by either consuming or investing, both of which help keep the economy humming along.

[lottin]

Maybe 'spending' is a better word, yes. However, 'consumption' isn't entirely inaccurate. Investment is the production of capital goods, and the production of capital goods involves consumption.

[lisper]

Well, yeah, you can't create something from nothing. But that's not exactly a deep insight. All economic activity involves consumption if you want to cast the net that broadly.

The point is:

> The idea that people need to be encouraged to consume (consumption being the opposite of saving) I don't think is supported by economic theory.

People absolutely need to be encouraged to be productive. That's the whole point of an economy, to encourage people to produce things that others want in exchange for other people producing things that they want.

Honestly, how could anyone possibly not understand that?

[lottin]

I understand it fine, I just don't agree with it.

The whole point of an economy is NOT to encourage people to produce things. The point of producing is to satisfy a demand for consumption, and individuals choose their level of consumption according to their preferences and budget constraints. They don't need to be encouraged to consume. That doesn't make any sense.

[lisper]

> The whole point of an economy is NOT to encourage people to produce things.

I guess we'll just have to agree to disagree about that. Maybe things are different where you are, but where I live most people expect to be compensated for their labor, and investors expect at least a shot at a positive ROI. But if you want to work for free, by no means allow me to discourage you.

> They don't need to be encouraged to consume. That doesn't make any sense.

You're right about that. But that was not what I said. I said that they needed to be encouraged to produce, not to consume.

> I understand it fine,

Manifestly not. You couldn't even write three sentences without losing the plot.

[lottin]

You said: "Hoarding/saving for long periods of time is bad because it discourages people from taking risks by putting resources to productive use"

And later you added that by "saving" you meant specifically "not spending".

Then "taking risks by putting resources to productive use" is just a fancy way of saying "producing"

So, you're saying that people not spending is bad because it discourages people from producing.

In a market economy, the optimal level of production is the level that satisfies the desired level of consumption. If people want to save more, and therefore consume less, and as a result we also produce less, that's not bad. That's how the economy is supposed to work.

[lisper]

> the optimal level of production is the level that satisfies the desired level of consumption

You're assuming that "the desired level of consumption" is a constant. It's not. It's a function that depends on circumstances. People discover new things, and some of those discoveries lead to desires that were previously unknown or even unimaginable. It would never even occur to our neolithic ancestors to want an iPhone or a Tesla. But some of our ancestors wanted to discover new things, and some of those discoveries naturally lead to discovering new things to want.

And that's not even mentioning the fact that one of the things that people naturally want is to have children, which leads to more people wanting things. So even if the things they want are the same old things, demand will naturally grow as the population increases.