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?
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:
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