Question

Write out the Accounting Identity of Savings = Investment

Make sure to identify each part of savings and investment

What is Odious Debt?

(Opinion:) Is the U.S. debt Odious?

Answer 1

The saving identity or the saving-investment identity is a concept in national income accounting stating that the amount saved in an economy will be the amount invested in new physical machinery, new inventories

We know in an economy Savings = Investment

So in order to show this we can take the National income identity and than derive the Savings and Investment Indentity from it.

We know that

Y = C + I + G Or I = Y - C - G , this shows that the invome which is in excess of consumption( private and government ) is invested.

We also know that

Y = C + S + T Or S = Y - C - T , this shows that income which is excess of consumption and tax is saved.

Now if we find the value of (Y-C) from both the Investment and savings identity and equate, we get

I + G = S + T Or, I = S + (T-G) , Here S is private saving and T-G (tax revenue-government expenditure) is government saving. So we can write as

I = S , where S=total savings both government and private.

A debt is considered odious debt when government leaders use borrowed funds in ways that do not benefit its citizens, and to the contrary, often oppress them. This means if a country's government misappropriates money it has borrowed from another country it is called odious debt.

I dont think that the US debt is odious because here the government uses the debt in the very suitable way for the development of the Nation and its people.