According to Ricardian equivalence, taxation and government borrowing have the same effect on spending in the private sector.

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According to Ricardian equivalence, the level of government spending does not affect private spending because individuals anticipate that any changes in government borrowing or taxation will eventually require offsetting adjustments in future taxes. Therefore, taxation and government borrowing have the same effect on spending in the private sector.

According to Ricardian Equivalence, Taxation and Government Borrowing Have the Same