I wonder just what the liberals/socialists thi

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I wonder just what the liberals/socialists think
the reason for trillions in American cash being hoarded is ?

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http://www.dailyfinance.com/on/corporations-c...n-profits/


Myth No. 3: All this cash is just sitting around for no reason.


All of this saving has added up to $1.5 trillion in cash reserves. That's a fact. But is it true that this is cash companies are free to spend, and invest in the economy, to get America growing again -- but they're just unwilling to spend it?

Not entirely. For one thing, as Lane explains, "about 60 percent of [non-financial corporate] cash piles are offshore and subject to as much as 35 percent tax if brought back to the U.S."

That's a serious disincentive to companies' trying to putting this money to work. It also means that there's about one-third less cash "out there" than we think -- because upon repatriation of these profits, one-third would immediately be claimed by the government (which would, of course, then put it to work in its own way.)

Perhaps the most surprising revelation about the $1.5 trillion in "cash on the sidelines," though, is that corporations aren't entirely free to spend it as they wish. This is because not all of this cash was amassed from profits that the corporations earned. A lot of it is money that they borrowed.

As shown in the first chart up above, companies grew their cash reserves by $33 billion over the six months from the end of 2012 to mid-2013. Meanwhile, the past 12 months have seen a $201 billion increase in corporate debt.

"Apples-to-apples," says Lane, "that means that over the past year at least, companies have increased their debt by a factor of six relative to cash growth." Lane went on to say that "the increased debt reflects a very accommodative bond and loan market in 2013, with low overall costs and attractive terms for borrowers."

Result: Today, nonfinancial companies have stacked up a staggering $4.8 trillion worth of debt owed to their lenders and bondholders.

The Upshot

A lot of this debt must be repaid in relatively short order. According to Moody's data, some $1.53 trillion in nonfinancial corporate debt matures over the next five years, which is actually a bit more than the $1.48 trillion in cash they've got on hand.

And so this is the real revelation: That "$1.5 trillion" that U.S. corporations supposedly have stashed in the bank, and are just too stubborn to spend? It's really not theirs for the spending at all. Every penny of it -- and more -- is already spoken for by the banks and other creditors who lent them the money.

Investors waiting for the happy day when all this money comes "off the sidelines" and floods into the market, lifting the economy, may be kept waiting far longer than they expect. What we should really be worrying about is the risk that corporations will have to take even more money out of the economy, to pay their debts.

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