There's an interesting tension in MMT-style advocacy of big deficits alongside price controls to constrain corporate profits. A government deficit must be matched by a surplus in the private domestic and/or foreign sectors. ...

The private domestic surplus is equal to private saving less private investment and the former is the sum of corporate retained earnings and household saving.

If we assume that the intention is not to reduce private investment, a higher private surplus requires higher household saving and/or higher corporate retained earnings. If price controls are used to constrain retained earnings, then household saving is the only option.

So, assuming that higher deficits don't translate one for one into a larger trade deficit, public deficits plus price controls leaves household saving as the only 'residual' in the system.

I'm not saying it isn't feasible, but as a policy mix it feels a bit like trying to squeeze all the air into one corner of a balloon -- would take a lot of economic skill and political will to pull off successfully.

In fact, given that household saving is made up of distributed profits and saving out of wage income, household saving *out of wages* is the residual because the former is squeezed by price controls.

Of course, this assumes uniformly applied controls when in reality only some prices would be controlled, so the distributional effects would be intra sector as well. (I think this is the conversation we should be having — which prices need to be controlled and for how long?)