Is seven trillion dollars really a lot of money?
http://www.cnbc.com/2014/01/22/global-companies-sitting-on-7-trillion-cash-double-2003.htmlThat is seven trillion dollars that the global business community is keeping in liquid cash...
Only one trillion being held by US companies...
http://www.cnbc.com/id/100911328Since this article is talking about the S&P 500, the calculation is easy, about 2 billion each but probably not evenly distributed.
Are we benefiting from these companies holding on to liquidity and safety ? Is a lot of safety and margin a benefit worthwhile?
Is that even a lot of money ? Where the S&P 500 is worth about $10,640,793,000,000 is it strange that they keep 1,000,000,000 in ready cash?
http://www.investopedia.com/ask/answers/05/sp500calculation.aspPerhaps this money held in reserve does represent potential infrastructure improvements , jobs , research and development ,and most of all return on investment , that is held in nascent form. Perhaps wise companies don't park lots of cash unproductively, but I doubt that this story is alike for each and every one of them. Government force or even encouragement is certain to apply unevenly as some of the companies will be better prepared to respond and give up cash than others. Where a new government policy might very well make one company create jobs , the same new rule may make another business destroy some jobs.
So I don't favor heavy handed government solutions , not only is heavy taxation bad , almost anything the government can do creates winners and losers where before there were competitors. If the government can prevent cheating it fulfills its role .
There already exist employee owned businesses, if there were an inherent advantage this would be a more common type. It still is not against the rules , is an employee owned business ever going to outcompete businesses that are run by professional managers? Perhaps this could be combined , if employee owners were to hire a very good manager as CEO and empower him perhaps it would not be a disadvantage to be employee owned . One of the things that can happen to an employee owned company is paralysis as each major decision must be submitted to the largest possible committee.
If our tax codes in the near future allow our businesses to repatriate a lot of money held in overseas subsidiaries ,with less penalty , a lot of that money held in reserve might just come home and look for a place to be invested. that could be generally a good thing and I expect it to be , but it will also make everything cost more so the benefit is not unmitigated even in that case.
