Theories can be proven true or false. Identities must always hold true.
The national savings and investment identity provides a critical framework to understand the flow of financial capital and determine the possible implications of increasing budget deficits.
Currently, many market participants are worried about the implications of massive government spending financed by debt. While this is a significant cause for concern based on the concepts outlined by the national savings and investment identity, using the well-studied formula, we can "game-out" all the various possibilities. Given that identities must hold, we know that re-arranging the