The Pug keep calm and wash your hands vintage shirt quantity of the spending, that is the accounting of the total amount of gross spending and gross income is describing only the transfer of ownership of money. And we must keep that accounting on the “income axis”. Whereas the type and amount of changes in the level of wealth is kept track of on the “wealth axis”. In the macroeconomy “total spending” does determine the “total income”, they are always equal. But even though the accounting of spending is not the accounting of wealth, spending can promote production of wealth, or it can pay for activities that preserve and maintain wealth. And sometimes spending can lead to the destruction or depletion of wealth too.
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Spending and wealth are Pug keep calm and wash your hands vintage shirt certainly related and interact but they are still independent variables. They must be accounted for with a model with two degrees of freedom. I believe that all sorts of misunderstandings of macroeconomics have resulted from the attempt to combine wealth and income so that they are one variable with one degree of freedom. I am saying, that in order to describe the economy as it really is, we must have a model where income and wealth are accounted for by two variables, not one. We can see how this operates in the concept Keynes described in what he called the “Paradox of Thrift”. In this macroeconomic concept, Keynes realized that any attempt to increase wealth, cannot occur if spending did not occur.
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