# Why can't saving be equal to income?

A person can save all his income , right ?

Then why can't saving be equal to income ?

In the context of aggregate demand and supply .

• You should add the full context in which you saw the claim "Saving can't be equal to income." – user18 Nov 16 '18 at 2:53
• @KennyLJ In context of aggregate demand and supply . – JIM Nov 16 '18 at 13:10
• If saving equals income on the aggregate level, then no one consumes and starves to death, i.e. there is no one left in the next period to live from these savings ;) – E. Sommer Dec 18 '18 at 9:05
• @E.Sommer Suppose a person if really rich and can use his past savings to live his rest of life comfortably . then can't he save all his income ? – JIM Dec 31 '18 at 14:51
• Yes, but this hasn't much to do with aggregate demand and supply, has it? – E. Sommer Jan 17 '19 at 14:50

Why can't saving be equal to income?

At the outset, income is taxed almost everywhere. Thus, a portion of a person's income cannot be saved because it is compulsorily allocated to the government. That by itself explains why saving cannot equal income.

Additionally, almost everybody has expenses so as to satisfy utmost essential needs (examples: food, housing, clothing) without which he or she would be unable to ultimate earn any income. An exception would be the person whose expenses are covered by someone else, but that assumption would have to be stated clearly.

In a context of "aggregate demand and supply" (?), the aforementioned assumption hardly makes any sense. At the aggregate level, some or all the earners have to cover expenses: theirs as well as those of the individuals "whose expenses are covered by someone else". That prevents a portion of their income from being saved.

let me try and make this very simple , okay ask yourself , if all money is saved ,then what do we use to buy food ? , water ? ,and every other things necessary for life (like wifi) ?
No state has the ability to provide "all" things for their people, even if they do its only a matter of time before the population surpasses resources.

a person (single) can save all his income if all things being equal food, water,other necessary stuff are provided , if not income !== savings

this is why aggregate income !== aggregate savings

• consider using $\neq$ – E. Sommer Dec 19 '18 at 11:14
• @YxngGod Suppose a person if really rich and can use his past savings to live his rest of life comfortably . then can't he save all his income ? – JIM Dec 31 '18 at 14:52
• The state is irrelevant: savings=income means that nobody is buying food, not even with taxes. – user253751 Sep 10 '20 at 12:21