The Center of the Universe

St Croix, United States Virgin Islands

MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

corp profits and the federal deficit

Posted by WARREN MOSLER on August 13th, 2013

Funny how little attention, if any, is focused on how corporate profits are a function of federal deficit spending?

Ideology conflicts?

Nothing ‘new’ about the idea that deficit spending and profits are related:

Kalecki’s most famous contribution is his profit equation.

In this model total profits (net taxes this time) are the sum of capitalist consumption, investment, public deficit, net external surplus (exports minus imports) minus workers savings.”

In any case, without an increase in net exports or some kind of material increase in credit expansion the decline in the federal deficit is highly problematic.

Corporate profits and the deficit as a % of GDP:

Full size image