0 = (Y1 - C1) + (Y2 - C2 )/(1+r)

C1 + C2/(1+r) = ?

(Y1 - C1) = (Y2 - C2 )/(1+r)

C1 + C2/(1+r) = Y1 +Y2/(1+r)

OB

DB

OY1+OY2

The area of the rectangle OY1AY2

F(K)/(1+r) minus K

F(K) minus K/(1+r)

F(K) minus K

K times (1+r)

that Ricardian equivalence fails.

that in a global world it is always possible for a nation to borrow abroad.

that a Ponzi-scheme is necessary so the firm is indifferent

that firms belong to their shareholders and the net return from investment raises their wealth

T1 - G1 - rGD1 > 0

D1 (1+ rG) > T1 - G1

rGD1 > T1 - G1

(G1+ D1) rG - T1 > 0