Question

Why is there a trade-off between the amount of consumption that people can enjoy today and the amount of consumption that they can enjoy in the future?

Answer 1

Investment programs increase the level of potential future production in the economy. Investment must be funded by investments, which is the only way forward if people are willing to reduce current consumption

In order to increase consumption in the future households, it is necessary to save so that companies can undertake investment projects which will produce the goods and services of the future. In other words, the resources will not be in place to produce the goods and services in the future without savings and investment (thus we can not have both). Typically a higher savings rate, the fraction of GDP not consumed today, results in higher investment rates. Thus, the more a society invests (and saves) in the future results in more opportunities for production, implying a higher growth rate.