patrick.net

S&P 500 is around 14 Trillion in market cap (at 1500). Companies earned about 1.2 Trillion in 2012 (102.47 in earnings and 30.44 in dividends). 50% of the earnings come from outside the US which means companies made 0.6 Trillion profit in US.

0.6 Trillion is less than 1 Trillion+ deficit that the federal government runs. If we combine the profits and deficits were are still running almost half a trillion deficit as a country. (I am excluding foreign earnings because many of those countries also run deficits in order to help private sector).

Companies benefit tremendously from government spending. Examples: Microsoft, IBM, Gilead.

Is this sustainable?

#investing