Why when income rises and we in turn consume more does our demand for money rise?What I really want to know is why just because I have a larger...

Your inference and conclusion would be the ideal answer to
the question, yet, the reality is that our current economy although is making us try to
save more money, is also making us more greedy. How? By making things so much cheaper
that we (unknowingly) jump on it, and tend to end up spending
more.

It is not the fault of the numbers, or the amount of
money you are getting, but mostly the fault of human psychology: When something is
"there" and "available", we just jump on it. We only realize how much we have bought and
indulged on AFTER the fact.

Now, if your question is a
moral one and an ethical one, the answer goes back again to human psychology and nature.
NO human being- unless prompted by a motivational factor that would bring to him a
similarly enticing result- will give up an earned reward.
Period.

Example: How come people spend more on stores who
sell for less? Because our nature is to get more for
less.

Conclusion: It is a tendency in humans to want more
for less, and to want instant gratification, and rewards for every single thing we do.
THAT is why end up spending more than what we are given and THEN require more in the
end.

The theories of motivation of Skinner, Erickson,
Freud, Bandura, and Gardner back this premise.