The importance of this topic is relevant to the economic multiplier effect and the waste of money's time (discussed recently).
Investment, to deviate slightly from Wikipedia, is total business spending excluding financing cashflows. It is Expenses plus plant and equipment purchases. It is not financial holdings.
Savings is money that is not spent or invested. While these definitions are simple and clear. It describes Savings as completely different and separate from Investment. "Investing" in the shares of a company by buying them form some other shareholder is Savings. Even trading your savings to a company (for,say, some of its shares) such that it holds them in their bank account is still savings.
Classical Economists viewed savings and investment as equivalent, under the presumption that Savings is available funds for Investment, and so Savings will eventually be invested or spent. The predominant view was that to increase Investment, you simply had to increase Savings, and this would allow bankers to lend to businesses at lower rates and thus increase investment.
A good critique by James Kroger led to his following formula for investment: Investment = (some % of Savings not used for Consumption) + (the corporate earnings that finance 85% of Corporate Investment) + (newly created money by the Fed deposited in banks)
- Wealth redistribution though taxation, basic income, and social dividends.
- Unfiltered, unpoliticised, wealth redistribution (basic income) is a far preferable system to ensure social harmony, than military/police/prison spending purposefully inflicting unhappiness on citizens. It also frees up people's time to pursue something productive.
- Unpoliticized wealth redistribution so that taxation cannot be claimed as theft used to fund winning political special interests.
- Relatively high corporate tax rates, combined with a tax code that simplifies receiving tax rebates for losses, such that investing in (good) ideas is less risky.
- Tax deductibility of corporate dividends so that corporate savings in excess of their future good ideas are redistributed to those who will spend or fund good ideas.
- High marginal personal tax rates, but with top marginal tax deductibility for investing and income splitting through personal services.
- Tax code incentives that encourage flow of funds into the economy through exports and imports.
- Reduce the need for savings and improve labour's health, productivity and competitiveness through universal healthcare.
- Natural finance structured organizations that foster investment and ventures with less required cash.
- Renewable energy production sufficient to drive down energy prices such that indoor agriculture, and other good ideas become economically viable. This would furthermore occupy people's time productively, and support higher populations.