After 1980 period, downsizing the public sector in economy is advocated commonly. In order to this, lowering public expenditures and budget deficits is proposed by especially neoliberal approach. However, there is not much evidence about downsizing public sector in many economies. The purpose of this paper is to explain why public sector downsizing is not possible because of the positive effects of public expenditures on total profits. Neoliberal approach aims to broaden private sector activity and so increase its profits. On the other hand, downsizing public sector is limiting total profits. Furthermore, due to the positive effects of the public expenditures on the total profits, modern economies are preserved from serious crises.