Technically this is described as the sectoral balances. I do not have time to explain this in great detail this morning: try this link for an explanation I did a while ago.
The sectoral balances are not some theory: they are simply an accounting identity. They say that in the case of a single currency (and for all practical purposes that is what the UK has, in the form of sterling) if one part of the economy, which we will call the private sector wants to save, then another part of the economy, which we will call the government sector, has no choice but borrow, most especially when that government is the creator of the currency in question. This is simply an accounting identity: double-entry will happen. The ramifications are, however, significant.
At the link – from his own blog recall – he shows us this:
Which shows us that there are three sectors, not two. Private (made up itself of household and corporate), government and damn foreigners. Even, the private sector – on net – and government both borrowing at the same time. Them damn foreigners doing the lending.
Which is pretty good really, isn’t it? OK, sure, having weird ideas about things is one matter. But being contradicted by your own evidence is something else, isn’t it?