The heart of Keynesianism is that the consumer drives economic activity via consumption and that an economy suffers when individuals "save too much". However, this is just not so. One simply cannot consume before producing something to exchange first or obtaining the ability to consume from another (such as a family member, bank, or other financial intermediary). If you doubt me, quit your job and see how long you can live on your own after you have burned through your savings. Good luck with that.
The act of savings can never detract from demand. Savings gets channeled to others with capital needs such as an entrepreneur funding a start-up enterprise, a business looking to expand a manufacturing facility, a local school district constructing a new building, or a young couple buying their first home.
Savings never sits idle. Banks and other financial intermediaries have every incentive to put that capital to work to earn the institution a spread between the rate it can loan the funds at minus what it must pay to obtain them. This is why a popular explanation among many economists that a "glut of savings" is the reason global interest rates have been at abnormally low levels is so absurd.
"To accumulate capital, we must reward the saver and encourage him to save. The man who accepts the responsibility of denying himself the pleasure of current consumption in order to save and accumulate capital is the real hero and patriot who is conferring vast blessings upon his fellows." Howard Kershner, Dividing the Wealth (Devin-Adair), p. 32.
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