The Atlantic Magazine published an article in their July 2012 issue, " The $5 Trillion Stash: U.S. Corporations' Money Hoard Is Bigger Than the GDP of Germany. " In this article, Jordan Weissman points out some of the implications of Mr. Johnston's revelations:
"Obviously, the precise amount of money sitting on the sidelines may have changed by now. But there's no reason to assume it's grown appreciably smaller, which is a problem. As Michael Mandel of the Progressive Policy Institute has written, lagging business investment is one of the chief problems slowing down our recovery. Companies are letting money sit idle, accruing minimal interest, rather than spending it on new equipment or offices--and that's not even touching research and development or new employees."
John Aloysius Farrell and Aaron Mehta wrote of the motive for the corporations keeping their profits offshore in their October 24, 2011 article, " Wealthy Corporations with a Trillion Dollars Stashed Offshore Lobby for a 'Holiday' from US Taxes," written for iWatchNews.org , pointed out:
"The Heritage Foundation, in an Oct. 3, 2011, report [15], concluded that 'this sequel to a similar 2004 holiday would, like its predecessor, have a minuscule effect on domestic investment and thus have a minuscule effect on the U.S. economy and job creation.' American companies are already awash in cash, noted Heritage scholars J.D. Foster and Curtis S. Dubay. And 'for those rare instances in which outside financing is needed, interest rates remain at historic lows.'
After a thorough review of the academic literature, I have not seen an article that says this does create jobs,' Dubay to iWatch News.
The Heritage report sparked a retort [16] from Grover Norquist at Americans for Tax Reform, another conservative group, who praised the stock buybacks and higher dividends that followed the 2004 law and asked: 'What's wrong with increasing shareholder value?'"
Plenty Grover, if it that means millions of Americans are without jobs.
Nothing can realistically be done about our national debt until our real unemployment rate--those who are receiving government unemployment insurance checks, together with those who are underemployed (working part-time when they want to work full-time), and those who have quit looking for work out of frustration--has dropped below six percent. And even then, the reduction of our national debt will remain anemic as long as reduced benefits on jobs are the rule not the exception, taking a cut pay is seen by many employers as a prerequisite for employment, and health care costs--including prescriptions--are not brought under control.
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