Therein lies the paradox. Individual savings is a virtue, but if the everyone saves (instead of spending on goods), your economy will slow down, reducing wages and driving down the amount of money you can save.
Thats why high savings countries like China have such low growth rates, and high-consumption economies like the US have such high growth rates.... err... what?
The idea that either consumption or investment is a necessary or logical lever for growth is silly. Infinite investment in an idea that is basically worthless will not make it functional. Infinite consumption in an economy that is basically unproductive will not make it prosperous.
In a high-savings economy, declining wages could be compensated for in the medium term by rising return on investment in companies that enjoy lower wages. Long term returns on k and l operate differently, and short term lower wages will definitely be the predominant effect.
