 
what happened when an economy went into an economic tailspin was that its 
income contracted, and what happened as its income contracted was that its 
savings were squeezed out. 
how could a community be expected to save as much when everyone was hard up 
as when everyone was prosperous, asked keynes. 
quite obviously, it could not. 
the result of a depression would not be a glut of savings, but a drying-up 
of savings; not a flood of saving, but a trickle. 
and so it was, in fact. 
in 1929 the american private citizenry put aside $3.7 billions out of its 
income; by 1932 and 1933 it was saving "nothing," in fact it was even drawing 
down its old savings made in the years before. 
corporations, which had tucked away $2.6 billions at the top of the boom 
"after" paying out taxes and dividends, found themselves losing nearly $6 
billions three years later. 
quite obviously keynes was right: saving was a kind of luxury which could 
not withstand hard times. 
but the practical consequence of that decline in saving was more portentous 
than the individual tragedies which accompanied it. 
it resulted in a paralyzing situation where the economy was in perfect 
"economic" balance, even though it was in the throes of social agony. 
for if there was no surplus of savings, there would be no pressure on 
interest rates to encourage businessmen to borrow. 
and if there was no surplus of investment (and the very essence of 
depression is that investment is not large enough), then there would be no 
impetus for expansion. 
the economy would not budge an inch. 
thus the paradox of poverty amidst plenty and the anomaly of idle men and 
idle machines. 
to be sure, at the bottom of a slump there is a heartless contradiction 
between a crying need for goods and an insufficiency of production. 
