Why personal finance strategies are not (or are) beneficial on a larger economic scale?

Question:

This question may not be as clear cut as it sounds in my head, because people have different personal finance strategies based on their income and circumstance. However, the heart of it is that many people base their views on how the economy should work by how their personal budgets/finance strategies work. Can you explain in simple terms why personal finance strategies are not (or are) beneficial on a larger economic scale?

Answer:

Take a simple textbook example due to Keynes. If you are spending beyond your means, a financial advisor may recommend some austerity on your behalf: ask you t cut spending, pay off your debt, and stay within your means. At the level of a country, the same austerity can be devastating (think Greece!) as belt-tightening by all would reduce demand and reduce employment causing further income losses.