one person's spending is someone else's income ( and savings). It's hard to fathom how decreasing income will help. Europe is finding this out the hard way. %40 of Germany's Euro surplus is a direct result of the pigs running a deficit.
Only an increase in aggregate demand will turn the economy around. Unknown to most people in this forum ( and almost every economist0. The U.S. Government operates a non-convertible floating currency (NCFC). No country with this type of currency, with it's debts denominated in it's own currency has went bankrupt. In the last 10 years the treasury has redeemed 347 trillion in treasuries. $47 trillion just in 2012 look it up. When the Government spends it increases the amount of reserves in the banking system by the same amount. (creates money)Collecting taxes or selling bonds does the opposite, it takes reserves from the banking system (destroys money). This is why countries that have a NCFC like japan, U.S., UK can have higher debt to GDP and not face the bond vigilantes. The assumption of neo classics is that there is a fixed pool of money and that governments compete with the private sector for this limited pool. However this is not the case for a NCFC it creates reserves when it spends( provides it's own liquidity).
In fact net private sector savings is equal to government deficit to the penny.
or to put it another way.
When a government is the monopoly supplier of a currency (i.e., monetarily sovereign), its [fiat] "deficits" supply savings, not the other way around.
If the government ran a surplus like a lot suggest than the private sector would have to run a deficit in order to supply the government's surplus. Hard to see how decreasing private savings will help either. In fact those that advocate balancing the budget and also increasing private savings have no idea that it is impossible. Look at the Clinton surplus during the same period the private sector had to take on unusually more debt to sustain itself.
In the western world every financial asset has a corresponding financial liability. The most liquid form of liabilities are called money. You can't increase savings without increasing liabilities only the distribution can change. The private sector can't stand to be in deficit very long, but as the issuer of currency (the government) can. The U.S. Government can meet any obligations denominate in it's own currency as Greenspan said.
