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Apple now holding more cash than USA

bbc.co.uk

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Re: Apple now holding more cash than USA

#81

Post by fauigerzigerk »

lallysingh wrote: post #76
fauigerzigerk wrote: post #72

Earlier quoted context omitted.

That's not entirely true. The effect you describe depends on loan growth. Money sitting in bank accounts isn't automatically funding anything. There has to be demand for loans and the banks have to be willing to lend, otherwise nothing happens. In other words, there's a difference between capital being available and capital being put to use. Velocity of money is important. Also, if I buy Apple stock today, Apple does…

But you did provide a little up-pressure on the stock price.

Sure, but that in itself does not make the economy grow. It could potentially make the economy grow if the person I buy the stock from uses it to buy other shares in an IPO and that company spends the money to fund actual work. Or if that person just puts the money into consumption.

I'm just saying that boosting some share price does not in itself fund any labor. That's important, because the difficulty of getting the economy growing again after a balance sheet recession like the one we just saw, is to get money moving, not just sitting somwhere with a nominal price tag on it.

Re: Apple now holding more cash than USA

#82

Post by dpark »

jz wrote: post #73
dpark wrote: post #53

Earlier quoted context omitted.

First, "not help" is not a synonym for "hurt". Second, if we assume that a dollar in one place does not always provide the same value to the economy as a dollar in another place (which everyone seems to agree on; they just don't agree on which places provide the most value), then we must conclude that over the long term sending as much money as possible to a sub-optimal place is worse for the economy than sending it…

You down voted my question but still did not provide a concrete example.

I didn't downvote your question. I don't believe HN lets you downvote someone who replies to you, and I don't have the karma to downvote anyway.

I don't think you would accept a concrete answer. Do you believe that every dollar in every place (federal tax revenue, corp coffers, billionaire's money market account, average joe's mortgage, food stamp, etc.) has the same value to the economy? If not, then you must agree that some of these are better places to send a dollar than others. Whether choosing a suboptimal flow "hurts" the economy is semantics.

If you think that putting another dollar in a wealthy man's account is the best use of the dollar, then I would say that history disagrees with you, as there's little evidence that "trickle down" economics work. Something like 80% of economists say it doesn't work.

Re: Apple now holding more cash than USA

#83

Post by dpark »

fauigerzigerk wrote: post #79
dpark wrote: post #53

Earlier quoted context omitted.

First, "not help" is not a synonym for "hurt". Second, if we assume that a dollar in one place does not always provide the same value to the economy as a dollar in another place (which everyone seems to agree on; they just don't agree on which places provide the most value), then we must conclude that over the long term sending as much money as possible to a sub-optimal place is worse for the economy than sending it…

But what is optimal? I think it's pretty obvious that taking money away from the rich giving it to the poor, maybe even in the form of food stamps, has a very direct and immediate effect on GDP. So it is clearly optimal in the short run in terms of GDP and also for helping those who really need it in times like these. But in the longer run, some of the money needs to go into investment or society will stagnate. Some…

I don't know what optimal is, but the evidence is that giving more to the wealthy doesn't help much. My family is decidedly upper-upper-middle class, and I won't pretend that cutting my taxes will stimulate the economy. Extra money is going into loan repayment or savings. If my taxes went away entirely, I'd spend more, but not enough to offset the loss of revenue to the government.

I fully agree that there must be private investments, and indeed there must be wealthy people. Whenever I hear someone say "No one needs more than X dollars", I immediately know that I'm talking to an extremely naive person. However, I do think that the pendulum has swung too far in favor of the wealthy, not just in terms of taxes.

Edit: Just to be clear, dumping money into the pockets of average Joes isn't necessarily going to do anything to stimulate the economy either. The tax rebates showed that.

Re: Apple now holding more cash than USA

#84

Post by alanfalcon »

xenophanes wrote: post #70
Natsu wrote: post #67

Earlier quoted context omitted.

Do you have a source on that?

http://www.advfn.com/p.php?pid=financials&symbol=NASDAQ%... 24.4% for apple http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho... 2.4% for google

You're comparing Moogles and Googles here.

Why would you source Apple's effective tax rate at http://www.advfn.com/ and not point out that on the same website, Google's effective tax rate is 21.4% and not 2.4%?

Re: Apple now holding more cash than USA

#85

Post by kwis »

fourspace wrote: post #66
JacobAldridge wrote: post #30

Earlier quoted context omitted.

"That's the only rational way to run a business." Actually, it's not - ask any business that's taken funding, borrowed to invest, or even run an overdraft as part of their low season. Spending less than or equal to revenues is one way to run a business, especially a small business that you only intend to grow incrementally (if at all). Borrowing to invest for faster growth is a very rational way to run a business in…

To clarify, I meant over the long term. If you're not making profits or at least breaking even over the long term (spending The problem with the US is that they aren't just borrowing in a low season, they're borrowing every season.

If my business could borrow at the same rates as the US government I would take on as much debt as possible, in perpetuity.

Re: Apple now holding more cash than USA

#86

Post by timedoctor »

The government will get the money eventually through increased taxes or through printing more money and deflating the value of the apple "cash" pile. All the Government has to do is to print money and they can take Apple's money without Apple being able to do anything about it!

Re: Apple now holding more cash than USA

#87

Post by thematt »

drcube wrote: post #77
thematt wrote: post #68

Earlier quoted context omitted.

Why should they pay tax on that money? It was generated in a foreign country by a foreign corporation and already subjected to foreign taxes. The US didn't expend resources helping them make that money, therefore it doesn't deserve any of it. If anything, we should be encouraging them to bring it back here.

Apple and Google are foreign corporations? Also, I know people who live and work in foreign countries and haven't stepped foot in the US for decades who still pay tens if not hundreds of thousands of dollars to the US each year in taxes. So yeah, it's unfair that large, American corporations are somehow exempt. I'm as tax-phobic as any red-blooded yank, but if we are going to demand ever increasing government service…

Apple and Google are not foreign corporations, but they own foreign subsidiaries which are responsible for doing business in their respective countries.

Re: Apple now holding more cash than USA

#88

Post by nkassis »

dpark wrote: post #52
nitrogen wrote: post #40

Earlier quoted context omitted.

If you distribute a million dollars across the entire US economy, that's roughly 30 cents per person, and it's likely to be spent on some chewing gum or a very small amount of food. It dissipates before it has a chance to grow. If concentrated, the million dollars can be applied to things that are only possible when money is concentrated, like doing research and development, investing in large construction projects,…

Money doesn't "dissipate" because it's spent. Money changing hands is what fuels the economy. There's also no reason to assume that tax money goes from wealthy pockets to poor ones directly. The government can build infrastructure (which they do a lot more of than private industry), fund R&D, etc. Individuals could also invest their money into funds that fuel R&D, fund startups, etc. It's incorrect to claim that only…

"There's also no reason to assume that tax money goes from wealthy pockets to poor ones directly. The government can build infrastructure (which they do a lot more of than private industry), fund R&D, etc. Individuals could also invest their money into funds that fuel R&D, fund startups, etc. It's incorrect to claim that only the wealthy invest."

And there are some project that only the government can take on due to how long cost recoup would be or the risk levels (Space, Internet...) but those things fund high paying jobs.

Re: Apple now holding more cash than USA

#89

Post by thematt »

entangld wrote: post #35

How do giant stacks of uninvested cash in corporate coffers improve the economy? I wish someone could explain this.

Those "corporate coffers" you refer to are real investments. Apple is not going to settle for getting a 0% return on the cash it holds. It has to put the money somewhere. It's going to invest it in something, whether it be stocks, bonds, or a bank account of some type...all of which benefit the economy in a different way.

Re: Apple now holding more cash than USA

#90

Post by nkassis »

ck2 wrote: post #60

Steve Jobs only pays 15% taxes which is probably part of it. (seriously, this is a fact http://seekingalpha.com/article/183086-steve-jobs-thrives-on... ) Take money from USA consumers, pour it into China manufacturing. They certainly aren't the only ones doing it but add them all up and you'll start to understand the problem.

Waren Buffet was talking a while back about how it's ridiculous that he pays 17% taxes when his secretary pays over 30%. He's not a big fan of the current capital gain tax.
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