Individuals not clear on the Paradox of Aggregate Thrift argue that it's perfectly rational for any individuals anywhere, no matter their aggregate context, to seek personal savings as a solution to their retirement needs.
Yes, that may seem rational, but it's not rational enough, by a mile!
If the cells in our body had such a definition of rational ... we call them rogue adipose cells, or even cancers.
Once aggregate investment falls short of the demand leakages ... the boom cycle ends in another bust.(And yes, for those new to semantics, aggregate financial savings is called a "deficit in fiat" ONLY in narrow accountants jargon.)
Yet everyone also knows that it's not enough to act on what's ONLY locally rational. Personal, local, regional and aggregate rationality all matter, in everything we do, or we wouldn't call ourselves a social species! A modern culture formed by a social species requires that the sum of all local+aggregate rationalities be greater than the sum of it's respective parts. And that's just the 1st step. It's the ante for even being in the cultural competition game.
We're never acting alone, and we all know it. Everyone is interconnected to those we have affinity for ... and responsibility for.
Somehow, our current training & education is failing to scale that affinity and responsibility past the primitive state of NeoLiberalism.
Why? And how? Distraction, I'd guess. Wealth breeds complacency and narrowing tunnel vision, until the next train comes down the track. Learning well comes down to teaching well ... to aggregate context, not arcane tests minus context.
If we don't do a better job of teaching emerging citizens how to optimize the optimal sum of personal savings PLUS aggregate options ... the only thing we'll accelerate is our Output Gap and our cultural demise.
