[vharuck]

>The economy doesn't collapse when people invest for the future, so I'm skeptical of that theory.

Investing is different from storing cash in your mattress for a rainy day. Investment is effectively buying things now (labor, machines, supplies, property) in order to produce something more valuable later. So that money stays active in the economy. Even if you're buying stock from somebody unrelated to the company behind the stock, that person might use your cash to buy a house, pay donate to charity, or start a company.

[WalterBright]

But again, people are delaying purchases because they'd have more money later. With people not buying, the economy collapses according to your theory. But that doesn't happen.

BTW, all the money you have on deposit is invested back into the economy by the bank, less the reserve requirement.

[littlestymaar]

> all the money you have on deposit is invested back into the economy by the bank, less the reserve requirement.

Please read how the money system works before talking on the topic, you really are embarrassing yourself here Mr Bright.

Banks aren't lending their customers' deposits (because you can't lend your liabilities…) and reserve requirements are in federal funds, which is a specific type of currency, it's not the same dollar as the one their customers have in deposits (which again, are on the liabilities side of banks balance sheet).