Corporate Stimulus

The FT picks up on a point – in the UK context – that I made a few months ago in “Why cutting fiscal deficits is an assault on profits.”

If the government wishes to cut its deficits, other sectors must save less. The questions are which and how. What the government has not admitted is that the only actors able to save less now are corporations. The government’s – not surprisingly, unstated – policy is to demolish corporate profits.

My piece looked at the same facts from a slightly different point of view;

So what this boils down to is that the government’s deficit spending is a combination of massive subsidy to the corporate sector and a preservation of bureaucracy which do nothing to help grow the economy.

However, the analysis is the same. The reason we don’t get any deficit cutting here in the US is because that would reduce corporate profits and the corporations will pay Congress and the President to prevent that from happening.

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