# How does a govt surplus increases investment?

From the closed economy equilibrium condition $$I = S + (T - G)$$, how does exactly a surplus (which I assume would be used for paying debt) increases investment in the same amount? I ask that because if the govt pays $$(T - G)$$ - assuming a surplus - to the public with a marginal propensity to consume equal to c, savings (and thus investment) would increase in $$(1-c)*(T-G)$$ and not $$(T - G)$$ (which is, of course, bigger). Am I losing something here?

• I think this really needs to be cut down to a single question, and the title needs to be the question, so that people can see exactly what the question is from the title There’s too many embedded questions in the text, and so there’s no easy way to answer them. – Brian Romanchuk May 7 at 22:54
• Thanks, Brian. I solved the first question by reading a few answers and a text-book but the second one still hangs. – Antônio Gabriel Zeni Landim May 8 at 22:56
• I don’t understand the question fully, but in general, a federal government surplus takes money out of the pockets of citizens at high speed. How this could increase investment at all seems very unlikely to me. – aliteralmind May 11 at 11:59