EconPapers    
Economics at your fingertips  
 

Deficits for the Rich: Inequality and Instability

Craig Medlen and Zelin Chen

Journal of Economic Issues, 2020, vol. 54, issue 2, 517-524

Abstract: Deficit spending has long been understood as a stabilizing counter-cyclical force. The thesis presented herein is that over recent decades, the cumulative deficits of government and non-corporate entities have expanded the inequality of wealth and income, which, over the long haul, contributes to slow growth and potential instability. The thesis builds on the Kaleckian-Minsky insight that deficits create gross profits in excess of new investment expenditures (free cash). Since the 1980s, this free cash has been spilled in the stock market through mergers, dividends and stock buybacks—worsening inequality. As the upper classes have a larger range of discretionary spending options, this expanded inequality has made for more spending volatility and speculative endeavors. The authors call for expanded taxes on the rich to claim the deficit-generated free cash. Such taxes would be in the service of more stability and equity.

Date: 2020
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1080/00213624.2020.1756663 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:jeciss:v:54:y:2020:i:2:p:517-524

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MJEI20

DOI: 10.1080/00213624.2020.1756663

Access Statistics for this article

More articles in Journal of Economic Issues from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2020-07-24
Handle: RePEc:mes:jeciss:v:54:y:2020:i:2:p:517-524