Unlike tariffs, fortunately, it cannot acquire a constituency and can therefore be dealt with without political rancour. Simply stated the fallacy declares that if everyone tries to increase their savings incomes and output will fall and unemployment rise. There is not a shred of truth in this and all the historical evidence clearly refutes it. A more subtle version of the fallacy claims that it is only in times of depression that increased thrift is detrimental because it reduces consumption. This too is nonsense.
Thrift means savings and savings are just another form of spending ask a banker.
In times of depression it is argued that increased savings will worsen the situation by lowering demand further. It inescapably follows from this that attempts by individuals to cater to their future needs, i.e., retirement, by saving may benefit them personally but at the expense of harming the economy. Keynesians call this particular action the fallacy of composition. Though such a fallacy itself is very real it does not apply to saving. It is true that a sudden increase in savings or the demand to hold money would disrupt the economy and cause unemployment.