The Ricardian equivalence is the idea that people curve their spending in lock-step with more government spending. This theory says that for every dollar the government spends more than from the previous year, the consumers spend an equal amount of dollars less. So if the government decided to spend a thousand dollars more than last year, consumption for the coming year would decrease by one thousands dollars. This decrease is thought to be caused by people expecting taxes to go up to accommodate the new spending. This theory breaks down to say that government interference cannot influence the economy, from a consumption standpoint. This concept is controversial in the field of economics; many economist doubt its existence as a whole. Some counter-factual evidence to the Ricardian equivalence would be the stimulus package under Presidents Bush and President Obama. These packages success is debatable, but if the Ricardian equivalence was completely correct then people would have gotten their stimulus checks and directly deposited them in to their bank accounts. Then used those deposited funds to pay for the inevitable tax increase. This was not what happened in the economy, directly after the stimulus packages. Interestingly, we did see people using the stimulus check to pay down debt, which is not the intended use of the stimulus plan (reducing debtors in the economy), but nonetheless brings up the perspective of freed capital. This freed capital, or investment, is what, in classical economics, is believed to drive economies. So while the Ricardian equivalence is controversial, and maybe empirically unfounded, it does give us a good thought experiment into how the government and its spending habits effect the decision of the individual consumer in the economy.