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This note shows that fiscal collapse is impossible regarding the debt-GDP ratio and challenges misconceptions in macroeconomics about investment and savings.
This short note presents a non-divergence condition of the debt-GDP ratio considering consumption from assets, and shows that fiscal collapse is impossible. Also in the supplement (Appendix 3) I present arguments on important misconceptions in macroeconomics about relationship between investment and savings. I will show that investment entities and savings entities are identical and that investment and savings are the same acts.
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Yasuhito Tanaka (2025) studied this question.
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